Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — TRANSPORT

British Rail (Investment)

Mr. Rost: To ask the Secretary of State for Transport how much British Rail has invested since 1979.

The Secretary of State for Transport (Mr. Paul Channon): The British Railways Board's investment in railways has been £3·7 billion at today's prices since 1979.

Mr. Rost: As British Rail seems to be unwilling or unable to prepare adequately and speedily for the opening of the Channel link, will my right hon. Friend assure us that he will do all he can to speed up private sector investment to do the job for British Rail to ensure that it is completed in time, which he has already said he is prepared to encourage?

Mr. Channon: As I am sure my hon. Friend is aware, British Rail is planning to choose the preferred route option by early next year. I welcome that speeding up of the original timetable, which will reduce the effects of blight in Kent. I believe that by early next year BR will also know the result of its approaches to potential private sector partners. Therefore, a lot is going on at the present time.

Mr. Andrew F. Bennett: Does the Secretary of State accept that commuters in Greater Manchester are fed up to the back teeth with the poor service that they are receiving from British Rail? The introduction of the sprinter train has been disastrous. When will the Government ensure that some money is spent in Greater Manchester on improving the services for commuters rather than those for mainline passengers travelling from one part of the country to another? In particular, when will we get the link to the airport?

Mr. Channon: I note what the hon. Gentleman has said. I still want to see considerable improvements in quality in British Rail in general, but British Rail is moving in the right direction in a number of sectors, including punctuality, cancellations and service to customers. I hope that the hon. Gentleman will take up the matter of commuter services with British Rail, or, failing that, perhaps he will write to me.

Mr. John Greenway: Can my right hon. Friend tell the House how much British Rail is investing in stations, because it is no good having good railways if the buildings that passengers must use are not adequate? Is he aware that the roof of Filey station has had to be removed and that at present British Rail is not prepared to replace it because of costs? Therefore, that fine Victorian building will be lost to coming generations.

Mr. Channon: I am sorry to learn about Filey station. I hope that my hon. Friend has taken up the matter with British Rail. The total investment of British Rail during the next five years will be some £3·8 billion, with more than £600 million being spent on stations.

Mr. Robert Hughes: If the private capital that the right hon. Gentleman is so keen on is likely to be attracted to British Rail projects because they make money, why, apart from ideological obsession, does he not encourage British Rail to go on with these investments, instead of being so restrictive by his criteria?

Mr. Channon: I do not think that is at all fair. If the hon. Gentleman looks at railway investment in the country at present, which the Opposition continually misrepresent,


he will see that ever since 1970 the highest figure for rail investment is that for the present year, and it will be higher in the future.

Mr. Robert Hughes: It is not.

Mr. Channon: It most certainly is. In real terms, it is the highest figure since 1970 and it is increasing.

North-East (Roads)

Ms. Armstrong: To ask the Secretary of State for Transport what plans his Department has to develop the road infrastructure of the north-east region.

The Parliamentary Under-Secretary of State for Transport (Mr. Peter Bottomley): The £12 million national contribution of transport supplementary grant is for local authority roads of more than local importance. Spending this year on national schemes will be £50 million. The 18 northern region national schemes will cost £170 million.

Ms. Armstrong: I thank the Minister for his reply, but is he aware of the continuing concern, especially among industrialists, about the state of the A1, which is the major link to the east coast area? With the coming of 1992 and what we shall be discussing later today, it will be even more crucial. The delays on the road are very bad, but, having lived through those delays, we will still end up with a road which it is acknowledged is not adequate to carry the traffic. It will be much overladen, as we shall have nothing more than a two-lane dual carriageway when it is finished. Will the hon. Gentleman give us some hope that there will be more investment and we will have a proper motorway?

Mr. Bottomley: Yes, and on my next visit I shall try to spell it out more plainly.

Mr. Holt: Will my hon. Friend thank the hon. Member for Durham, North-West (Ms. Armstrong) for becoming a late convert to the Conservative pledge of action on the A1? Is that not in stark contrast to the attitude of the Labour-controlled Cleveland county council, which has refused to put money into a private programme to see whether it is feasible to have a proper motorway to the north-east of England? That council is the backwoodsman which is driving industry away from the north of England. It is the Conservatives who have been after this motorway for a long time. We look to you to do it.

Mr. Bottomley: If I may answer on your behalf, Mr. Speaker, yes, and I do not know.

Driving Test

Mr. Barry Jones: To ask the Secretary of State for Transport what initiatives his Department is taking to ensure sufficient availability of driving tests for trainees at transport training centres (a) nationally and (b) at the transport training centre, Llay, Clwyd.

Mr. Peter Bottomley: All requests for block bookings at Llay are being met. The number of HGV-PSV examiners nationally is being increased by 20 per cent.

Mr. Barry Jones: Does the Minister accept that the work at Llay is extremely important to the economy of north-east Wales? Will he always ensure that there are enough examiners at the right time?

Mr. Bottomley: I agree with the hon. Gentleman on his first point and I shall try to meet his request.

Sir Anthony Grant: Apart from the availability of driving tests, is my hon. Friend satisfied with the standard of the training at the centres? My observation, particularly on the M11 and M 25, is that the standard of HGV driving is not improving and is, in many cases, deteriorating.

Mr. Bottomley: We are satisfied with the standard of the test. We are not satisfied, however, with the number of failures, especially car examinees, 50 per cent. of whom fail their tests. I believe that if 20 per cent. of them could hold back and receive proper training it would make it much easier to cut the waiting times and achieve greater safety on our roads. I pay tribute to our examiners who go out with drivers, half of whom they know, in advance, will not be qualified to drive safely.

A13 and A127 (Improvements)

Dr. Michael Clark: To ask the Secretary of State for Transport what plans there are for improvements to the A13 and A127 during the next three years.

Mr. Peter Bottomley: Four schemes on the trunked part of the A13 and two on the A127 are planned to start in the period.

Dr. Clark: Is my hon. Friend aware of the hostile reaction from road users on the overcrowded A 13 and A127 to his recent comments that money spent on roads in the south-east represents poor value for money because the roads will be used only for commuting into London? Bearing in mind the excessive development that is taking place in the south-east and the large amount of road tax that has been paid over the years by people in that region, does he accept that improvements to the roads that I have mentioned are urgently required?

Mr. Bottomley: The answer to the second part of my hon. Friend's question is obviously yes, because I want my hon. Friend the Member for Southend, East (Mr. Taylor) and my right hon. Friend the Member for Southend, West (Mr. Channon) to be happy.
I should apologise for my foot-in-the-mouth remarks, which were slightly exaggerated both in the way in which I said them and in the way in which they were reported. Good roads help economic development, help bring environmental relief and help to cut casualties. If we can have the type of development in the rest of the country that we are witnessing in London and the south-east, we shall all benefit. Roads are being built in all parts of the country.

Mr. Tony Banks: I wish to congratulate the Minister on what I thought was his outstanding cheek when he arrived 40 minutes late for a meeting and suggested that traffic congestion was a sign of economic success. If one applies that criteria, one must therefore assume that Calcutta—

Mr. Speaker: Order. The question is about the A13.

Mr. Banks: This is all to do with traffic congestion. The A13 goes right through the London borough of Newham, which I have the honour to represent. I merely wish to point out to the Minister that if congestion on the A13 and elsewhere is a sign of economic success, one can only assume that the homelessness in Newham is a sign of the success of the Government's housing policy and that


people waiting for a hospital bed demonstrate that the Government's health policy is a great success. Where does the Minister stand in respect of road construction in London? He knows that extensive road construction in London is extremely unpopular.

Mr. Bottomley: I thought that the one part of London in which it was not controversial to build better roads was the east end, where people have been looking for better jobs and environmental relief from through traffic for many years. I suggest that if the hon. Gentleman is keenly interested he should change the habits of the past few years and ask to come to see me, when I shall go through the matter with him in person.

EC (Transport)

Mr. Ieuan Wyn Jones: To ask the Secretary of State for Transport when he last met the European Community Commissioner with responsibility for transport; and what matters were discussed.

Mr. Paul Channon: Last Thursday, 20 October, when we discussed aviation matters.

Mr. Jones: In view of the growing importance of the A5 as a major route linking Ireland to Europe and of the fact that the European Commission is more likely to consider joint approaches for funding, will the Secretary of State consider meeting his Irish counterpart to see whether a joint approach could be made to the Commission to improve the A5 through north Wales and parts of north-west England, to link into the M54 and the motorway network?

Mr. Channon: That is an ingenious proposal, and I shall consider it. As it happens, I am seeing the Irish Minister on Wednesday next. Of course, the terms of any new infrastructure spending on roads in the hon. Gentleman's constituency are not yet settled. An application to the European regional development fund is also possible, and no doubt the hon. Gentleman and his council have that in mind.

Mr. Fry: As my right hon. Friend discussed aviation with the Commissioner, can he tell us what progress there has been towards a greater liberalisation of European air services and, particularly, towards a reduction of European air fares, which are much too high?

Mr. Channon: A specific question on air fares appears later on the Order Paper. Perhaps I may deal with the matter then.
We are pressing ahead as fast as possible with air liberalisation in Europe. The next stage will be 1990, when we shall review the progress so far made. One satisfactory thing that I know my hon. Friend will welcome was the general agreement among European Ministers of Transport to a central flow management unit, which will be run on a European basis and will very much help the problems of air traffic congestion.

Mr. Winnick: Will the Minister receive a report of the sinking of the cruise ship Jupiter? Is he aware that the missing teacher, Mr. Bernard Butt, had taught at a school in my constituency—T. P. Riley—since 1970, and that all the reports suggest that he was far more interested in saving as many pupils as possible than in saving his own

life? Our deepest sympathy goes to the relatives of Mr. Butt and to the parents of the child who is missing, Vivenne Barley.
Does the Secretary of State agree that much courage was shown by many of the pupils when they were in the water, and that some lives were undoubtedly saved because of their courage? Has he seen the report in this afternoon's newspaper—

Mr. Speaker: Order. I know that this is a tragic matter, but it must be related to the European Community Commissioner.

Mr. Winnick: When the right hon. Gentleman has discussions with the EEC Ministers, will he take up the issue of ships' safety? It appears that the Jupiter was 27 years old and not as safe as it should have been. That is apparently to be discussed by the sea authorities. Will the right hon. Gentleman be getting a report on it as quickly as possible?

Mr. Channon: Although this matter will not arise at the meeting with the European Commissioner, I am sure that the whole House agrees with the hon. Gentleman. Our deepest sympathies go out to the families of all involved, British and Greek, especially to the families of Miss Barley and Mr. Butt, whose loved ones are still unaccounted for.
The Greek authorities have begun a full inquiry into this tragic episode. We shall keep in close touch with them, and I take note of what the hon. Gentleman said.

Mr. Moate: Is there any pressure on my right hon. Friend, or any desire on his part, in view of the general moves towards harmonisation throughout Europe, to increase maximum permitted lorry weights in this country?

Mr. Channon: There is certainly no desire on my part to do so. Whether the Commission will show any desire to do so remains to he seen. I hope that my hon. Friend, with his usual vigilance, will remain closely in touch with me.

Mr. Tony Lloyd: Will the Secretary of State raise with the Commissioner the stability of the class of ferry to which the Jupiter belonged? Will he also raise with him the fact that if the Jupiter had been a roll-on roll-off ferry the number of deaths would almost certainly have been massively higher? Will he also ensure that access to proper representation at any inquiry held in Greece is given to the bereaved families and to those who survived the accident?

Mr. Channon: None of those issues is likely to arise at my meeting with the European Commissioner, but the important points made by the hon. Gentleman about the safety of ships will be considered by the Greek inquiry. As I told the House, I shall remain closely in touch with events. Appearances at inquiries will be a matter for my right hon. and learned Friend the Foreign Secretary. The Foreign Office will do all that it can wthin its consular authority, and I shall draw the hon. Gentleman's question to the attention of my right hon. and learned Friend.

Computer-controlled Traffic Systems

Mr. Batiste: To ask the Secretary of State for Transport what progress has been made in introducing computer-controlled traffic systems.

Mr. Peter Bottomley: Thirty towns and cities in Britain use SCOOT—split cycle and offset optimisation technique


—which responds to changing traffic. Other British systems are being used and developed on motorways and elsewhere in the interests of safety, the environment and easing congestion.

Mr. Batiste: My hon. Frend may be aware that at the time of the abolition of the West Yorkshire metropolitan county council I expressed the desire that its important pioneering work in the computer control of traffic should be continued and developed. I am delighted to hear thar the work is spreading. Will he confirm and bring to the attention of local authorities the dramatic improvements that can be made to traffic flow in cities that introduce effective computer control of traffic?

Mr. Bottomley: Yes. This is an area in which Britain leads the world. Our system is being used from Canada to China, and I hope that it will be used even more widely in Britain. It is spreading quite quickly.

Mr. Flynn: Will the Minister confirm that if computer control techniques had been used the shaking of the Severn bridge into early senility would not have taken place? Can he confirm what the Secretary of State said, namely, that regardless of future traffic predictions the second Severn crossing will be built in the mid-1990s?

Mr. Bottomley: The hon. Gentleman is perfectly aware of the position. He should have welcomed my right hon. Friend's statement before the summer recess, which provided the opportunity for the private sector to come forward with proposals. The hon. Gentleman gives the impression of damning the present bridge with faint praise. In terms of axle weights and numbers of vehicles, the bridge carried much more than was expected. It was a great success, and when it has been strengthened it will be even more successful. The whole House looks forward to the opportunity for extra crossing capacity, especially if it can be provided earlier by the private sector.

Air Fares

Sir Peter Emery: To ask the Secretary of State for Transport what recent action he has taken to bring about a further reduction of air fares between London and other European centres.

Mr. Channon: We are using the provisions of the European Community fares directive to support United Kingdom airlines in their efforts to introduce lower fares. We have already achieved significant reductions in fares to a number of European destinations, the latest of which is Paris.

Sir Peter Emery: I congratulate my right hon. Friend on his success, but does he realise that even the reduced fares are some of the most expensive per passenger mile in the world? One can fly across America for the same price as a ticket to Brussels. That must be nonsense. Is there any support that the House, Committees of the House, the public or institutions can give to my right hon. Friend in asking the Commission to consider the restrictive practices in the pricing policy of European airlines, which it has put off doing for some time?

Mr. Channon: The more pressure there is from passengers throughout the Community, the better. With the help of several other Governments, the United Kingdom Government have been doing their best to

persuade European Governments of the advantages of liberalisation. We shall continue to press them, although we have not succeeded in all cases in convincing them. But there have been some encouraging signs, especially in fares to Ireland, Holland and France. We have a long way to go, and we are determined to make progress in this area.

Mrs. Margaret Ewing: Will the Secretary of State remember that not all European centres lie on the other side of the English Channel, and that there are some north of London? In that context, will he examine the fares policy operating within the United Kingdom? Is he aware that landing charges at Scottish airports are so high that one could have a cheap package holiday for a fortnight in Majorca for the price of the air fare between London and some airports in Scotland? Will he use his powers under the Airports Act 1986 to remedy that?

Mr. Channon: On domestic fares, as opposed to fares to other parts of the Community, of course I cannot force airlines to use their existing rights, but there is competition and there is the prospect of lower fares. I welcome the initiative of the airlines which propose to reduce fares, and I hope that people will press for that to continue. I shall consider the hon. Lady's point about landing charges.

Mr. Colvin: My right hon. Friend mentioned liberalisation. The package introduced in 1983 for the liberalisation of inter-regional air services was welcome, but will he see what can be done to remove the 70-seat, 30-tonne limit on aircraft for those inter-regional services? Encouraging more services must be one way of reducing prices.

Mr. Channon: My hon. Friend has put his finger on an extremely important point, which is under discussion at the moment. Talks are going on about liberalising the regional air services agreement and the question of the weight limit is one of the most important matters being considered. I shall bear in mind what he has said. I hope that we shall be able to persuade our European partners to agree with us on that matter.

Channel Tunnel

Mr. Corbett: To ask the Secretary of State for Transport what meetings his Department has had with outside bodies in the last six months with regard to customs arrangements for the Channel tunnel.

The Minister for Public Transport (Mr. Michael Portillo): The Department has been in regular contact with the other Departments concerned with frontier controls for the Channel tunnel, with the corresponding authorities of the French Government, and with Eurotunnel and British Rail.

Mr. Corbett: Does the Minister understand that those who use the high-tech tunnel will expect matching facilities from Customs and Excise? Will he confirm that on-board customs would improve the present inadequate vigilance at ports of entry for drugs, explosives and weapons and would cut journey time?

Mr. Portillo: The hon. Gentleman is right to stress the controls that will have to remain in place. I emphasise that section 12 of the Channel Tunnel Act 1987 requires on-train controls for services to points north of London, provided that British Rail can provide acceptable facilities.

Mr. Marlow: Will my hon. Friend accept that Customs and Excise controls are ineradicably linked with immigration controls and that both take place in much the same situation? Will he confirm to the House that immigration controls in this country are at the frontier, that we do not have internal immigration controls as other Community countries do, and that therefore it is vital that we have a proper and adequate scheme of immigration control at the frontier, whatever other European countries may feel?

Mr. Portillo: My hon. Friend is right to say that there are major differences between the systems of different countries. Our controls exist basically at the borders and are not internal controls based on identity cards. Community Governments have adopted a declaration that the Single European Act should not affect the rights of member states to take such measures as they consider necessary to control, among other things, traffic in drugs. There is no difficulty on these matters.

Mr. Wigley: Does the Minister accept that the worst possible thing would be a clogging up of trade in the vicinity of the entry to the tunnel, and that not only are on-train facilities needed, but that the provision of bonded warehousing away from south-east England and through traffic from the Irish Republic through Wales and England to the tunnel and Europe must be considered? Can he assure the House that all those aspects are being considered?

Mr. Portillo: I can assure the hon. Gentleman about that. He will know that, under section 40 of the Channel Tunnel Act, British Rail is obliged to consult the regions on what facilities should be provided for through services. Those consultations are under way and working groups have been established in each region, one for passengers and one for freight. The result of those deliberations will be made known towards the end of next year.

Mr. Snape: Will the Minister confirm that on-train customs and immigration facilities are customary between countries such as East and West Germany, France and Switzerland and, most remarkably, between Northern Ireland and the Irish Republic? As those facilities are so widely available, will the Minister and the Secretary of State for Transport do what they can to overcome the Prime Minister's xenophobia and not allow themselves to be distracted by the similar xenophobia of the hon. Member for Northampton, North (Mr. Marlow)? Let us have proper facilities for passengers using the tunnel.

Mr. Portillo: My hon. Friend the Member for Northampton, North (Mr. Marlow) made the pertinent point that we have different systems. The balance of probability would seem to be that there will be frontier controls at Waterloo for trains terminating in London and on-train controls for trains going further than London. That has yet to be confirmed, because discussions on that subject are continuing.

British Rail

Mr. Cran: To ask the Secretary of State for Transport when he last met the chairman of British Rail; and what matters were discussed.

Mr. Portillo: My hon. Friend the Secretary of State last met the chairman of British Rail on 5 October. A variety of railway matters were discussed, including the Government's approval of investment in new rolling stock.

Mr. Cran: Does my hon. Friend agree that British Rail's cost-efficiency programme appears to have been achieved mainly at the expense of consumers, which is evidenced by poor timekeeping, overcrowding and dirty carriages? In view of that, the deficit that British Rail enjoys and will continue to enjoy, and the fact that British Rail is incapable of providing a decent link between Humberside and London and almost every other part of the United Kingdom, will my hon. Friend tell us when he will bring forward a privatisation programme, because it seems to me that a privatised British Rail could hardly be worse than the one we have?

Mr. Portillo: My hon. Friend is a well-known defender of the interests of his constituents, but he should pursue some of those matters with British Rail. The Government have set quality of service targets for punctuality, reliability and cleanliness and InterCity is close to achieving all those objectives. In reply to the last question that he asked, he will know that my right hon. Friend has confirmed that privatisation is an option that we are actively studying.

Mr. Kennedy: Given the front page report in The Times today about the five different options which are being considered and which will possibly be outlined by the Secretary of State later this week—or some combination thereof—may I ask whether any discussions have taken place with the chairman of British Rail in advance of that with a view to being able to offer any degree of security to the railway lines in the north and Highlands of Scotland, because many of us with local knowledge find it hard to believe that any system of privatisation would lead to the future security of those vital rail links?

Mr. Portillo: We have given undertakings that we are not looking at a large proposal for the closure of railway lines. I remind the hon. Gentleman that in 1988–89 £609 million was provided in PSO grant, of which £434 million was for provincial services. In 1989–90 the figure will be £533 million, of which £383 million will be for provincial services. The hon. Gentleman is being hasty in jumping to the conclusion that there are any implications in the privatisation discussions for the matter with which he is concerned.

Mr. Burns: Will my hon. Friend draw to the attention of the chairman of British Rail the urgent need for something to be done to stop the disgraceful scenes that have taken place on many evenings at Liverpool street station, where City lager louts are terrorising commuters travelling to Chelmsford and Southend.?

Mr. Portillo: I know that the chairman is extremely concerned about that because he wishes to provide a secure and safe environment for his passengers. It is as well to pay tribute to the British Transport police, who play an important part in controlling such situations at stations.

Mr. Redmond: Does the Minister agree that British Rail provides an excellent service from Doncaster to London and that privatisation could not improve that service? Will he mention that to the knockers behind him?

Mr. Portillo: I hope that the hon. Gentleman, who finds satisfaction with the service, will inform the chairman of British Rail of that, because he receives a lot of complaints and I am sure that he will be pleased to hear that praise.

Mr. McCrindle: Are there any plans to discuss with the chairman of British Rail, and more particularly with the chairman of London Regional Transport, the worrying development of the arrival of the vigilante group, the Guardian Angels? Does my hon. Friend agree with British Transport police that that is a potentially dangerous development and that it would be far better to devote increased resources to the British Transport police, who continue to perform valuable work?

Mr. Portillo: I have already paid tribute to the British Transport police and feel sure that if they feel that there is any constraint on their resources they will find a way of letting the Government know.

Mr. Robert Hughes: Does the Minister understand that constant references to privatisation threaten the integrity of the British Rail system and raise apprehensions about railway lines other than the most profitable? Does he further understand that leaks to the press do nothing for the morale of British Rail and that he is putting a blight on all initiatives from British Rail? If the Minister is to discuss those matters, what about discussing them with the House of Commons instead of with Lobby correspondents?

Mr. Portillo: The hon. Gentleman could no doubt use an Opposition day to discuss those matters if he wishes. I have every confidence that British Rail is not finding it difficult to pursue its programmes. The management of British Rail has been extremely entrepreneurial, forward-looking and effective, and I have been impressed by it.

Manchester Ship Canal

Mr. Butler: To ask the Secretary of State for Transport what representations he has received regarding the making of a harbour revision order for the Manchester ship canal company; and if he will make a statement.

Mr. Portillo: Objections to the proposed order have been made by trade union interests and by a group of shareholders. Since the objections have not been withdrawn, a public inquiry will be held, as required by the Harbours Act.

Mr. Butler: Will this be an opportunity for the public to obtain guarantees that the intended owners of the Manchester ship canal company will pay more regard to the environment than the current owners of the company, Manchester city council?

Mr. Portillo: My hon. Friend will know that there is no effect on the ownership of the Manchester ship canal company, although there is a proposal that there should be changes in the board of directors. The effect of the order on the company's policies and activities is likely to be raised at the public inquiry. I hope that my hon. Friend will understand when I tell him that it would therefore be wrong for me to comment on that in detail.

Hull-Teesside (Road Links)

Mr. John Greenway: To ask the Secretary of State for Transport what representations he has received on improving road links between Hull and Teesside; and if he will make a statement.

Mr. Peter Bottomley: A number primarily seeking an east coast motorway, which is not planned. Schemes in the programme are designed to meet future north-south traffic needs in north-east England.

Mr. Greenway: While I note my hon. Friend's comment that a motorway on the east coast is not planned, does he not agree that such resources as might be available would be better channelled towards improving existing roads throughout north Yorkshire? It is 50 miles from the A1 to the east coast and the continuing growth of housing, commerce, industry and tourism in north Yorkshire demands that the A19 and the north outer ring road at York be improved and dualled.

Mr. Bottomley: Yes, as long as my hon. Friend the Member of Langbaurgh (Mr. Holt) is not listening.

Sir Ian Lloyd: In considering the technicalities of improving road links, has my hon. Friend given any thought to the representations that he has received from many of my constituents about the newly completed road link between Emsworth and Chichester—

Mr. Speaker: Order. The hon. Gentleman knows that the question is about road links between Hull and Teesside.

Mr. Bottomley: Let me say briefly that we shall do the best that we can to make all our roads as effective and quiet as possible.

Civil Aviation Authority and British Airports Authority

Mr. Bradley: To ask the Secretary of State for Transport when he last met the chairman of the Civil Aviation Authority; and what was discussed.

Mr. McCrindle: To ask the Secretary of State for Transport when he last met the chairman of (a) the Civil Aviation Authority and (b) British Airports Authority plc; and what subjects were discussed.

Mr. Channon: I meet the chairman of the Civil Aviation Authority and British Airports Authority plc from time to time to discuss matters of mutual interest.

Mr. McCrindle: As it appears that both BAA plc and CAA are now agreed that there is a likelihood that there will be a need for additional runway capacity before the turn of the century, can my right hon. Friend give me any idea whether there is also an agreement between BAA and CAA on whether such additional runway capacity should be situated north or south of the Thames?

Mr. Channon: I should not like to comment now on the views of BAA or CAA on the issue because, as my hon. Friend knows, I am awaiting a report from the CAA on this specific topic, which is extremely important. I hope to receive it in a few months' time. It is important that we look at the future airport and runway needs of the south-east of England. That will be reported to me. As to


where and if a new runway should be provided, the one thing that I should say to my hon. Friend is that the one place where it cannot happen is Gatwick.

Mr. Wilson: When the Minister meets the chairmen of BAA and CAA, does he spin them the same old rubbish that he gave the House earlier this afternoon about domestic air fares having nothing to do with him and competition being the force that somehow controls them? Is the right hon. Gentleman aware that the return air fare between Glasgow—incidentally, the European city of culture, so cultured that there is not a single Tory Member of Parliament—and London is £152? That is after the privatisation of British Airways and the supposed introduction of competition on that route. Does the right hon. Gentleman say that the free market, or the cartel, is working on such routes?

Mr. Channon: What I accept is that there is continuing need for competition on domestic and, indeed, foreign routes. I am sure that, in the long term, competition will lead to a better service for passengers and that it is more likely that lower fares will be achieved.

Mr. Jessel: Will my right hon. Friend tell both the CAA and BAA that, around Heathrow, there is deep hostility to any increase whatever in airport facilities?

Mr. Channon: My hon. Friend does not astonish me by his views. I shall bear them in mind. Indeed, they are extremely important. I know the views of my hon. Friend and his colleagues.

Mr. Spearing: When the Secretary of State next meets the chairman of the Civil Aviation Authority, will he remind him that two undertakings given by the builders of London City airport about new radar installations and the system of instrument landing were not complied with when the airport was built? Will he get from the chairman of the CAA an undertaking that proper evidence will be taken about short take-off and landing regulations throughout the world and that this evidence will be given to a forthcoming inquiry on an application for the use of jet aircraft?

Mr. Channon: I had better make no comment on a forthcoming application, which will be decided in due course. Of course I shall discuss with the chairman of the Civil Aviation Authority the first of the hon. Gentleman's allegations, but I am sure that the hon. Gentleman has already done that on many occasions.

Metroplitan Line (Uxbridge)

Mr. Shersby: To ask the Secretary of State for Transport what progress has been made within the central London rail study which he set up on 25 March; whether the study includes an appraisal of the service on the Metropolitan line serving Uxbridge; and if he will make a statement.

Mr. Portillo: We hope to receive a report from the central London rail study and announce the main findings towards the end of the year. The options being considered include the improvement of Metropolitan line services.

Mr. Shersby: Is my hon. Friend aware that the service on the Metropolitan line to Uxbridge has deteriorated very considerably in recent years because of the very heavy

usage of the service? That has necessitated some trains being taken off to allow the signalling procedures to operate properly. Will he look carefuly at this matter and consider what additional resources and facilities can be devoted to rail travel between Uxbridge and central London, as this is of great importance to people living in the area?

Mr. Portillo: I am sorry to hear about my hon. Friend's problems. He has put his finger on the matter of new investment, which may be the key. This year £230 million was invested in London Underground and he will draw considerable comfort from that. That investment is 50 per cent. up on the last year of the GLC.

Oral Answers to Questions — ATTORNEY-GENERAL

Social Security Commissioner for Wales

Mr. Wigley: To ask the Attorney-General whether he has received any further representations concerning the office of the Social Security Commissioner for Wales in Cardiff.

The Solicitor-General (Sir Nicholas Lyell): Since 1 January 1988 my noble and learned Friend the Lord Chancellor and I have received 22 representations about the closure in August 1986 of this office, of which none have been from appellants.

Mr. Wigley: Is the Solicitor-General aware that there is a strong feeling in Wales that this office should not have been closed? For the sake of convenience, and for hearing cases in the medium of the Welsh language, there should be such a facility in the capital city of Wales because there is such a facility in the capital city of Scotland and, I understand, in Northern Ireland. Will he look at this again, because we had this facility until 1986 and should certainly have it in future?

The Solicitor-General: I understand the feeling, but I must tell the hon. Gentleman that since 1986 nobody has asked for a Welsh-speaking commissioner. Only two or three of the four days available each month have been taken up with oral hearings. Most of the hearings are written, and from representations made to the commissioners many Welsh people in the north seem to find Liverpool or London more convenient than Cardiff.

Director of Public Prosecutions

Mr. Janner: To ask the Attorney-General when he last met the Director of Public Prosecutions; and what matters were discussed.

The Attorney-General (Sir Patrick Mayhew): I last met the Director of Public Prosecutions on Friday 21 October. We discussed matters relating to the Crown Prosecution Service.

Mr. Janner: Having regard to the Government's epic, disgraceful and disastrous mishandling of the "Spycatcher" affair, has the learned Attorney-General discussed with the Director of Public Prosecutions whether there are to be prosecutions under the Official Secrets Act arising out of this or similar matters? If he has discussed


that with the director, what are the results, who is to be prosecuted and what was considered? If he has not discussed those matters, why not?

The Attorney-General: The answer to the first part of the hon. and learned Gentleman's question is no; the second part of the question does not arise; and the answer to the third part is that prosecution decisions are taken in the light of available evidence.

Several Hon. Members: rose—

Mr. Speaker: Order. May I draw to the attention of the House that the next question is specifically about "Spycatcher"?

Mr. Devlin: When the Attorney-General last spoke to the Director of Public Prosecutions, did he draw his attention to the recent report in The Northern Echo to the effect that the defendants pleading not guilty on Teesside have to wait up to 20 weeks for their cases to come before the courts and that this is due to a shortage of magistrates and prosecutors? Did the Attorney-General ask the director when he last spoke to him whether anything would be done to increase the supply of prosecutors in the north-east or to put in a stipendiary magistrate in Teesside?

The Attorney-General: I did not raise the matter with the director when I saw him last on Friday. The availability of magistrates is a matter for my noble Friend the Lord Chancellor, as is the administration of the courts, but as to the availability of prosecutors, I should be surprised if a shortage of prosecutors was responsible for delay in bringing cases to court of anything like the order that my hon. Friend mentioned. However, I shall look into the matter and write to my hon. Friend.

Mr. Mullin: Has the Attorney-General any plans to prosecute or investigate those involved in the attempt by the intelligence services to overthrow the elected Government, or am I being naive in asking this?

The Attorney-General: The hon. Gentleman is perhaps being engagingly harsh upon himself, and I should not wish to criticise him. However, I draw his attention to a statement by my right hon. Friend the Prime Minister in May of last year, in which she drew attention to the fact that, over four months, the director general of the security service had investigated the allegations to which the hon. Gentleman has referred and had concluded that there was no evidence to support them, and that, accordingly, no further action was being taken in that regard.

Mr. Holt: Will my right hon. and learned Friend confirm that, in the recent correspondence that I have had with the Home Office, it has become clear that large bookmakers, every day, induce people to bet and break the law, and that the Government, through the DPP, have never brought a prosecution against any of these major bookmakers, who daily flout the law of the land? Will my right hon. and learned Friend undertake to speak to the DPP about this scandalous state of affairs?

The Attorney-General: I must gently correct my hon. Friend, who complained that the Government, through the prosecution service, have never brought a prosecution. The Government do not bring prosecutions in these circumstances. This is a matter for the independent prosecution service. I am not familiar with the

correspondence to which my hon. Friend refers, but I shall look at it, and, if it seems appropriate to do so—I expect that it is, since my hon. Friend asked me to do so—I shall draw it to the attention of the DPP.

"Spycatcher"

Mr. Winnick: To ask the Attorney-General if he will make a statement on the latest position regarding legal action in the case involving the book "Spycatcher".

The Attorney-General: On 13 October the House of Lords refused permanent injunctions against the relevant newspapers. The Law Lords made it clear that this was solely due to wide publication of the book abroad, constituting, in the words of Lord Keith, the senior Law Lord, heinous treachery by Mr. Wright which would have been restrained by the courts in this country. Holding that a life-long duty of confidentiality bound all members and former members of the security services, and that, save in very exceptional circumstances, newspapers are not free to publish confidential material, the House of Lords established unequivocally the very principles of law for which the Government have always contended, and accordingly entirely vindicated the Government's determined stance.

Mr. Winnick: Is the Attorney-General aware that a victory by the newspapers over the Government in this case is a victory for press freedom and civil liberties? Is any further legal action to be taken against the book being published here? Has not enough money—over £1 million—been wasted in this case? Is it not the case that, under the Government's proposals for changing the Official Secrets Act, it will be virtually impossible for newspapers to give or publish details of alleged wrongdoings and abuses in the security services? Have not newspapers in an open, democratic society a duty and responsibility to reveal such abuses? Are not the Government far more concerned about covering up abuses than about allowing newspapers the freedom that we all cherish?

The Attorney-General: The speeches of the Law Lords about future publication and distribution are publicly available, and it is for all concerned to take their own legal advice. As to the expenditure of public money, it is disgraceful that Mr. Wright's treachery made the expenditure necessary. In this new area for the application of the law relating to confidentiality, important principles, for which the Government have contended, have been established and we shall implacably seek their enforcement and application in any future case. Therefore, it is money well spent.

Mr. Richard Shepherd: I am glad that my right hon. and learned Friend conceded that the Government had lost the case. Is he aware that Lord Goff said that this was a misuse of the injunctory procedure? Does that mean that the Government will take on board two of the contentions mentioned in the course of proceedings, the first by Lord Griffiths about the public interest defence and, secondly, the judgments in respect of prior publication? Does that have an implication for the reform of section 2 of the Official Secrets Act, as postulated by the Government in their White Paper?

The Attorney-General: Of course, I and the Government will take on board—to use my hon. Friend'


words—every aspect of every speech in this case and will not seek to put a gloss on them, but, in view of my hon. Friend's implicit criticism, I should draw his attention to the concluding remarks of Lord Keith, the Senior Law Lord. He said:
In the first place I regard this case as having established that members and former members of the Security Service do have a life-long obligation of confidence owed to the Crown. Those who breach it, such as Mr. Wright, are guilty of treachery just as heinous as that of some of the spies he excoriates in his book. The case has also served a useful purpose in bringing to light the problems which arise when the obligation of confidence is breached by publication abroad.
So far as there may be any implications for the Government's announced reform of section 2 of the Official Secrets Act, that is, of course, a matter for my right hon. Friend the Home Secretary.

Mr. John Morris: Will the Attorney-General confirm that it was only because of his inability to prosecute Wright in this country that fruitless and expensive actions in Australia and New Zealand were commenced? Would the advice be the same if the need arose in the future for the same kind of action to be commenced in foreign jurisdictions? Was it because of, or in spite of, the Law Officers' advice that the Wright case was continued right to the bitter end? Once the issue of principle was lost in Australia, why was there the need to continue to try to gag the British press right up to the House of Lords? Is it not time for proper and independent machinery to be set up to supervise the security services—machinery in which we can have confidence—to ensure that, whatever actions Wright and his colleagues took, such an incident will never be repeated?

The Attorney-General: I will answer the questions for which I hold some ministerial responsibility. The absence of Mr. Wright from this jurisdiction made it impossible to bring any prosecution. As to any future publication outside this jurisdiction, the Law Lords have drawn attention to the fact that we cannot look to foreign courts to protect even the publication of very serious secrets. At the end of Lord Keith's judgment he said:
There is no reason to expect that secrets concerned with matters of great current importance would receive any different treatment
in foreign courts. He therefore went on to say:
Consideration should be given to the possibility of some international agreement aimed at reducing the risks to collective security involved in the present state of affairs.
I should have hoped to hear from the right hon. and learned Gentleman and from other Opposition Members some concern for the preservation of the confidentiality of such matters because, in certain circumstances, the preservation of the lives of those people who serve in these services depends on that preservation.

Oral Answers to Questions — OVERSEAS DEVELOPMENT

AIDS

Mr. Butler: To ask the Secretary of State for Foreign and Commonwealth Affairs what assessment he has made in his allocations of aid to countries in sub-Saharan Africa of the impact of negative growth in the economically active sections of the populations of those countries consequent upon the AIDS epidemic.

The Minister for Overseas Development (Mr. Chris Patten): We have made major financial contributions to help support programmes aimed at combating AIDS. We are providing £5·63 million over five years in support of the World Health Organisation's co-ordinated national AIDS programmes in five African countries. We have contributed £7·75 million to the World Health Organisation's global programme on AIDS, which is working with over 150 countries, including 44 in Africa. In addition, we are supporting research into the long-term demographic, social and economic support of the disease.

Mr. Butler: Does my hon. Friend agree that sub-Saharan African countries should be completely open about the scale of the problems that they face when they make their applications to him?

Mr. Patten: Fortunately, we have found that we have been able to conduct an increasingly open dialogue with sub-Saharan African countries about this problem, which is a global problem, not just one for Africa. We have been helped considerably by operating principally through the World Health Organisation and its admirable special programme on AIDS. I went to Geneva last week to discuss it with the WHO and am extremely impressed by the progress that it has been making.

Sir John Stanley: What steps are the Government taking to try to get a greater international follow-up to the initiative taken and the work started by my right hon. Friend the Chancellor of the Exchequer last year to alleviate the debt burden of the sub-Saharan African countries?

Mr. Patten: My right hon. Friend is correct to imply that many of the countries most affected by AIDS are also most afflicted by the burden of debt. I am delighted to say that progress has been made since the Toronto economic summit towards implementing the initiative of my right hon. Friend the Chancellor of the Exchequer. It seems that the first reschedulings under the Paris club should start this month. I am sure that the whole House will want to congratulate my right hon. Friend on the success of the initiative.

British Council

Mr. Patrick Thompson: To ask the Secretary of State for Foreign and Commonwealth Affairs if he has any plans to review the role of the British Council in the administration of Britain's overseas aid programme; and if he will make a statement.

Mr. Chris Patten: The Overseas Development Administration is currently reviewing arrangements for paying the British Council for the services it provides in administering the aid programme. Reference was made to the plans for this review in the Treasury minute on the 23rd report of the Public Accounts Committee, Session 1987–88.

Mr. Thompson: I am grateful to my hon. Friend for that reply. Does he agree that the role of the British Council in helping with the overseas aid programme is not sufficiently recognised? Will the review include the books presentation programme and technical co-operation training programme?

Mr. Patten: The review will include those two programmes as well as schemes for providing English language teaching staff, for overseas education seminars and for parts of our technical co-operation projects. I agree with my hon. Friend about the skill of the British Council in administering our programme. I have been most impressed by what I have seen of its operations around the world, but I am sure that there is still scope for making its work even more efficient, effective and economical.

Mr. Cousins: Given the impending visit of Prince Sihanouk to the Prime Minister, does the Minister think that the British Council might be a vehicle through which the Government could assist voluntary agencies such as Oxfam, which is supplying the entire water supply to the city of Phnom Pen?

Mr. Patten: That supplementary question demonstrates considerable ingenuity. I shall be making an announcement tomorrow about the development of the joint funding scheme so that humanitarian work by non-governmental organisations in Cambodia can be carried forward.

Mauritius

Dr. Twinn: To ask the Secretary of State for Foreign and Commonwealth Affairs what development assistance he is giving to Mauritius; and if he will make a statement.

Mr. Chris Patten: Gross British bilateral aid to Mauritius in 1987 amounted to some £8 million. As I saw for myself in May, Mauritius makes excellent use of it

Dr. Twinn: As trading interests are more important than aid for Mauritius and other ACP countries, will my hon. Friend ensure that the interests of these countries are properly looked after in the renegotiation of the Lome convention?

Mr. Patten: We have been pressing during the discussions on the renegotiations of the Lomé convention for more openness in the trading regime under that convention. It is obviously especially important when export earnings from trade are so much more important to ACP countries than aid flows. We are pressing particularly for the greater liberalisation of trade arangements for items such as sugar, which would be of especial importance to Mauritius.

Mr. Janner: Having regard to the needs of Mauritius, to the excellent relations between the United Kingdom and the island, and perhaps even to its strategic importance, will the Minister give the House an assurance that aid will be increased during 1988?

Mr. Patten: That will depend on a number of issues. First, it will depend on whether we are successful in winning one or two more contracts under the aid and trade provision; secondly, it will depend on the progress that we make in two sectors in discussions with the Mauritian Government—first, in doing more in the environmental sector with them; secondly, in further strengthening our arrangements for helping them with their water supply. There are excellent twinning arrangements with the Severn-Trent water authority, which I wish to see strengthened.

Aid and Trade Provision

Mr. Dykes: To ask the Secretary of State for Foreign and Commonwealth Affairs how many aid and trade provision agreements have been signed in the most recent year for which figures are available; how much aid and trade provision was made available; and what was the total export value.

Mr. Chris Patten: In 1987–88, 38 aid and trade provision agreements were signed, involving commitments of £149 million in support of United Kingdom export business worth £429 million.

Mr. Dykes: I thank my hon. Friend for those encouraging figures. Bearing in mind the future importance of China and its development in relation to our trade, do the ATP and soft loans agreements help the Chinese economy, and in what other ways are we helping the Chinese through my hon. Friend's Department?

Mr. Patten: I am delighted to say that we have almost committed all the £300 million soft loan agreement with China that was first signed in 1986. I have just signed a further £300 million soft loan agreement with China, which I think will be more flexible than its predecessor. It will enable us to choose between supporting developmentally sound projects through mixed credits or by through soft loans, and it will help us, I hope, further to strengthen our economic partnership with China.

Miss Lestor: Given the criticism from the Select Committee on Foreign Affairs, which called for ATP to be withdrawn from the aid programme and transferred to the Department of Trade and Industry, will the Minister reconsider his Department's refusal to act on that advice? If not, will he at least ensure that the amount is strictly limited to the 5 per cent. as it was under the Labour Government?

Mr. Patten: I think that one needs to be rather flexible about the amount, particularly—and I hope that this will continue to be the case—as more countries become creditworthy while still remaining too poor. In response to the first point, when we responded to the FAC report we made it clear that we did not agree with it about the departmental responsibility for ATP. It is no criticism of my right hon. and Friends in the Department of Trade and Industry to say that if the House is concerned about the developmental soundness of projects supported under ATP, it is not a bad idea to leave responsibility for that programme with the ODA.

Mozambique (Refugees)

Mr. Hanley: To ask the Secretary of State for Foreign and Commonwealth Affairs what assistance Her Majesty's Government are providing to help the large numbers of Mozambican refugees who have fled to Malawi and neighbouring countries.

Mr. Chris Patten: So far in 1988 we have provided over £4 million for Mozambican refugees in neighbouring countries, of whom there are currently more than 900,000, £3·6 million has been channelled through the United Nations High Commissioner for Refugees and £550,000 given to voluntary agencies for the purchase of blankets, clothing and other relief goods.

Mr. Hanley: That is an excellent and humane response, but how many refugees have entered Malawi? What help are we giving to that beleagured country with its problems?

Mr. Patten: The last count of the number of refugees in Malawi carried out in July suggested that there were 630,000 in Malawi, although refugees were still arriving at the rate of about 15,000 a month. So far we have made £2·6 million available to the UNHCR for programmes in Malawi and nearly £500,000 to provide relief goods for new arrivals. The Government of Malawi deserve our thanks and congratulations on the way in which they have responded to what is a particularly difficult situation.

Sub-Saharan Africa

Mr. Tony Lloyd: To ask the Secretary of State for Foreign and Commonwealth Affairs what was the total British bilateral aid given to the whole of sub-Saharan Africa in 1979, and in the latest year for which figures are available, in constant prices.

Mr. Chris Patten: British bilateral aid to sub-Saharan Africa was £386 million in 1979 and £284 million in 1987

in constant 1987 prices. On the same basis British aid to sub-Saharan Africa channelled through multilateral institutions rose from £161 million in 1980 to £209 million in 1986.

Mr. Lloyd: Does the Minister accept that, given the scale of problems in sub-Saharan Africa—where the position deteriorated considerably over those years—the reduction in real terms in aid—and that is what we are talking about—from the British Government is absolutely outrageous? What does the Minister intend to do about that?

Mr. Patten: There are more than two views on whether the problems have increased in severity in sub-Saharan Africa over that period. Happily, more and more sub-Saharan African countries are embarking on economic reform programmes, with substantial assistance from this country. We have contributed £2·25 billion to aid programmes in sub-Saharan Africa over the past five years. I would envisage an increasing part of our growing aid programme going to support economic reform in sub-Saharan Africa.

Nicaragua (Hurricane)

Miss Joan Lestor: (by private notice): To ask the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on what aid the Government intend to offer Nicaragua in the aftermath of the recent hurricane.

The Minister for Overseas Development (Mr. Chris Patten): Following consultation over the weekend with international relief agencies, I am now making available £250,000 to Nicaragua and other countries in the region affected by Hurricane Joan.
This assistance is in addition to the initial £10,000 I authorised over the weekend for our ambassador as a very first contribution in the form of cash to meet immediate local requirements. This new money will be channelled through international agencies such as the Red Cross and United Nations Disaster Relief Office as well as British voluntary agencies such as Oxfam. The European Community is also providing emergency relief of £430,000 for Costa Rica and Nicaragua—our share of which is some £86,000.
We are now discussing urgently with the agencies the precise allocation of the £250,000 as emergency needs and priorities start to become a little clearer. As I have said, I am ready to respond to requests for assistance from any of the countries, including Nicaragua, that are suffering as a result of this hurricane. As always, we will keep the situation under very close review and do whatever we can to help.

Miss Lestor: I was glad to hear the Minister's announcement, which represented an increase on the figure announced in the press.

The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Eggar): The hon. Member for Eccles (Miss Lestor) has got the wrong end of the stick.

Miss Lestor: Just a moment. Presumably the figure announced in the press was an initial reaction pending the statement that has been made to the House today. Okay? Is the Minister's friend happy?

Mr. Eggar: indicated assent.

Miss Lestor: Thank you—then I shall continue.
We also welcome the Minister's statement that the matter is fairly open in respect of any further request that may be made.
As most people are aware, the latest reports are that there are about 50 dead in Nicaragua, that 300,000 more people have been affected, and the Hurricane Joan is moving at a colossal rate, leaving behind a trail of destruction that has devastated timberlands, cattle ranches, rice fields and, as I understand it, most of the coffee harvest. The country is in a very grave state. The British Government made a rapid and generous response after Hurricane Gilbert in Jamaica, although I know that the devastation there was greater than it is at the moment in Nicaragua.
However, I ask the Minister to comment on information I have received, that the Nicaraguan embassy has said that the British Red Cross has a plane loaded with 38 tonnes of emergency aid ready to go to Nicaragua, but

that it needs £160,000 to send it there. I understand that a request has been made to the Ministry to fund that exercise. Will he make a favourable response, and include in his statement today an undertaking that he will consider sympathetically any further requests that come his way?
The Minister mentioned the fact that it was recognised that other countries have been affected and are likely to be affected in the future, so I shall not pursue that point. However, I urge the Government to use their good relations with the United States Administration and to advise them to accept the democratically elected Government of Nicaragua. After the 1979 earthquake, the United States-sponsored civil war and Hurricane Joan, the people of Nicaragua need peace now more than ever before. Support for the Contras against the democratically elected Government is totally unacceptable.

Mr. Speaker: Order. These comments are somewhat wide of the question.

Miss Lestor: I accept that they are wide of the question, Mr. Speaker: I was trying to make the point that the hurricane comes on top of all the other disasters that have confronted Nicaragua, and that the things that are now taking place there stand in the way of assistance being used effectively.
Finally, has the Minister considered using the garrison in Belize and whether it has a role to play in the relief effort? Perhaps he will comment on that point.

Mr. Chris Patten: Perhaps I can answer those five questions fairly briefly.
First, the hon. Member for Eccles (Miss Lestor) was right to say that the £10,000 is what we normally provide immediately to whoever is on the spot so that they can buy medicines and blankets and meet early emergency needs. Perhaps the fact that, unusually, the amount was announced at the weekend gave the hon. Lady the wrong impression about our overall contribution towards dealing with the disaster in Nicaragua, Costa Rica and conceivably elsewhere.
Secondly, the precise scale of the devastation in Nicaragua is not yet clear. It looks as though the hurricane hit the Atlantic coast with particular force and did the greatest damage there: it seems that it did not do as much damage as it moved across the country to the Pacific coast. It has, however, taken off again off the Pacific coast under another name. [Interruption.] It would not be tremendously funny if one was living on the Pacific coast of Nicaragua. We shall obviously need to take account of further developments, because we may need to provide more assistance.
Thirdly, we have been in touch with the Red Cross. That is one of the first agencies that we contact in cases such as this. We shall look at the issue mentioned by the hon. Lady of the supplies that may or may not be about to fly with the Red Cross from Heathrow.
Fourthly—this goes slightly wide of my brief and remit —I assure the hon. Lady that the Government, like the rest of the European Community, support the peace process in central America. I am sure that she will have read the exchanges in the House on the subject last week, in which I know that the hon. Member for Newham, North-West (Mr. Banks) played a distinguished traveller's role.

Mr. Tony Banks: Thank you. At least I have been there.

Mr. Patten: I shall not dwell on the way in which the hon. Gentleman got there.
Finally, we have had no requests about the use of the garrison at Belize, but obviously we deal with any requests for the use of MOD facilities, or our armed forces, as promptly and helpfully as we can.

Mr. Jacques Arnold: In making this welcome contribution to the assistance being given to central America, will my hon. Friend bear in mind our long-standing connection with the Bluefields area through the Mosquito protectorate that this country had with the area some years ago? When considering the distribution of potential additional amounts, will he give some thought to assisting that area and the Caribbean Commonwealth countries to prepare for the all-too-frequent hurricanes that occur there, both with emergency planning and with preparations for future events?

Mr. Patten: I know how much my hon. Friend knows about the region, and the area to which he refers seems to have been the most affected by Hurricane Joan. I am pleased that my hon. Friend the Under-Secretary of State for Foreign and Commonwealth Affairs was able to meet a delegation from the area last week, and I am sure that we shall have its needs very much in mind when it comes to the allocation of disaster relief assistance.
The issue of preparedness is of course particularly important, and we have just allocated $250,000 to UNDRO for a study that it is doing on preparedness in the Caribbean. I hope that that will help the countries in the region that are affected so frequently by hurricanes to prepare more adequately for limiting the amount of damage that they do.

Mr. David Steel: The people of Nicaragua will be grateful for the Minister's prompt response to the disaster. Will he bear in mind, however, that our regular aid programme to Nicaragua has declined considerably from about £400,000 10 years ago to £100,000 now? There is clearly scope for generosity. Will he examine the reports coming in of the economic disaster to the cotton and coffee crops on which Nicaragua depends for her exports, and if necessary give expert as well as cash aid?

Mr. Patten: It is true that our bilateral aid programme to Nicaragua peaked 10 years ago. That, of course, was when the last Labour Administration gave about £400,000 to the Somoza regime—a point which, I am sure, features prominently in the memoirs and the diaries of the period. The main contribution that we now make to Nicaragua is multilaterally, through the European Community.
Altogether, the EC had a programme in 1986, which is the last year for which we have figures, of about $9·2 million, to which we contributed about 20 per cent. In addition, we are supporting about 40 non-governmental organisation projects in Nicaragua.

Mr. Neil Hamilton: Does my right hon. Friend agree that, whatever the damage caused by this hurricane, it is tiny compared with the economic catastrophe imposed upon the people of Nicaragua by the Marxist economic policies of their Government? If we are to give aid to countries in the Caribbean area, would it not be better to give it to those countries that support pro-Western policies, such as Jamaica, rather than to those that are in thrall to the Eastern bloc, which could support them itself?

Mr. Patten: One can make a valid distinction between humanitarian assistance and long-term development aid. However, I agree with my hon. Friend about the damage done by the economic policies which I believe are now associated with the name of Mr. Ligachev and are not widely regarded as being terribly successful.

Mr. John Fraser: As the Member of Parliament for Lambeth, which is twinned with Bluefields, Nicaragua and which has given a great deal of help already, I ask the Minister if he would consider matching the private contributions made to the disaster relief funds initiated by boroughs such as Lambeth. Secondly, does he appreciate that one of the great problems in Jamaica and in Nicaragua is that a hurricane cuts out income from foreign exchange for tourism and cash crops because of the immediate destruction that it wreaks? Will he consider making sufficient foreign exchange available from this country, or together with other countries, for the immediate import of essentials, such as lumber, zinc and spare parts to make good some of the damage caused by this catastrophe?

Mr. Patten: First, we already match, through our joint funding scheme, on a pound-for-pound basis, and I would be reluctant to extend that principle. The joint funding scheme has been successful, which is why we have increased it by about 200 per cent. in the past two or three years.
Secondly, I believe that foreign exchange is more of a problem for Jamaica, which has a more substantial tourist industry, than for Nicaragua, but, obviously, contributions made in sterling by outside donors are of some help to the foreign exchange position of the assisted countries.

Mr. Ian Bruce: Does my hon. Friend agree that one of the additional modes of aid that we give to the Caribbean is having a ship always on station from Her Majesty's forces? In fact, I had the honour of being on the Caribbean guard ship HMS Newcastle until a few days ago and I saw the plans being made by the Ministry of Defence to go to the aid of people hit by hurricanes. Does he not agree that it is excellent that, after Hurricane Gilbert, we had a ship in the Cayman Islands the day immediately after the hurricane? It gave immediate aid there and then went on to Jamaica to give continued aid. Does he agree that this form of aid, where Ministry of Defence money is being used for humanitarian reasons, is an excellent way for Britain to play its part in this work?

Mr. Patten: Speaking as the Member for a landlocked Navy city, I am delighted to endorse what my hon. Friend has said. The Navy provided considerable assistance after Hurricane Gilbert, especially to the Caymans and Jaimaica. It does an outstanding job. We also have reason to be pleased about the contribution that the armed forces have made after other emergencies and disasters.

Ms. Dawn Primarolo: I visited Bluefields in Nicaragua in May and, speaking to the Minister as a Member of Parliament for the next constituency along from his landlocked one, I remind him that the Atlantic coast region was almost totally devastated by this hurricane. Seventy-five per cent. of Bluefields and 95 per cent. of Corn Island have been completely destroyed. Bluefields, which is a substantial city on the Atlantic coast, and has existed since 1620—its connections with Britain have been stated previously—has


been destroyed to the extent that it may have to be abandoned as a community. We appreciate that the Government have made an issue—[Interruption.]

Mr. Speaker: Order. This is a private notice Question.

Ms. Primorolo: I was coming to the question, Mr. Speaker, but some of the points have not been made.
Will the Government and the Minister accept that what is needed for Nicaragua is substantial Government aid now? People do not have shelter. I urge the Minister to reconsider so that the Government can make available now massive aid to the Atlantic coast region through the ODA. The Government should consider the use of Belize and the possibility of an emergency unit within ODA to fulfil our obligations.

Mr. Patten: With respect to the hon. Lady, I am not sure whether she has raised any additional points. We are providing immediate emergency assistance and, as I have said, we will keep the situation under urgent review. I am sure—at least, I think I am—that the Opposition would be just as concerned if the hurricane had hit Panama.

Mr. Tony Banks: May I remind the Minister that the greatest damage to Nicaragua has been caused by the state-sponsored terrorism of the Reagan Administration.

Mr. Speaker: Is this about the hurricane?

Mr. Banks: It is about the damage to Nicaragua.

Mr. Speaker: The question should be about the hurricane, please.

Mr. Banks: The amount of money that the Minister has announced this afternoon is pathetic in comparison with the problems that exist. Will the Minister pay a visit to Nicaragua? Perhaps he would take with him the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs, who says a great deal about Nicaragua but has never ventured there. If they encounter any difficulties with travelling, I could perhaps have a word with General Noriega and he could take them in his jet.

Mr. Patten: It is conceivable that I tend to be rather choosier than the hon. Gentleman about whom I hitch lifts with.

Several Hon. Members: rose—

Mr. Speaker: Order. We have had a good run on this private notice question.

STATUTORY INSTRUMENTS, &c.

Mr. Speaker: With the leave of the House, I will put together the four motions relating to statutory instruments.

Ordered,
That the Customs Duties (ECSC) (Amendment No. 2) Order 1988 (S.I., 1988, No. 1314) be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Small Claims (Scotland) Order 1988 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the draft Sheriff Courts (Scotland) Act 1971 (Privative Jurisdiction and Summary Cause) Order 1988 be referred to a Standing Committee on Statutory Instruments, &amp;c.
That the Food Protection (Emergency Prohibitions) (Amendment No. 3) Order 1988 (S.I., 1988, No. 1675) be referred to a Standing Committee on Statutory Instruments, &amp;c.—[Mr. Dorrell.]

Orders of the Day — European Communities (Finance) Bill

Considered in Committee.

[SIR PAUL DEAN in the Chair]

Mr. Tony Marlow: On a point of order, Sir Paul. As always, it is my desire to be helpful. My admiration both for you, Mr. Deputy Speaker and for Mr. Speaker is second to none, as is my admiration for the Clerks' office which does a great deal of preparation for our sessions.
You will be aware, Sir Paul, that the main body of the Bill is divided into two parts. One is about on-going payments to the Community—that is the modern term for it—and the other part is about a special once-for-all intergovernmental agreement or loan to the Community. Since the Bill was first brought forward, we have discovered, fortunately, that the Community has a surplus of funds. That may not have been apparent to the people who have helped you, Sir Paul, to select the amendments to this Bill. Therefore, there is no longer any need for the second part of the Bill.
I believe that an amendment has been tabled to strike out or delete the second part of the Bill; that is, that amendment has not been called for debate, but I ask you, Sir Paul to look at the matter afresh, especially bearing in mind that the money is no longer needed.

Mr. Teddy Taylor: On a point of order, Sir Paul. The Bill before us covers two wholly separate issues. There may be many people in the House who would agree to a change in the own resources decision, but would object strongly to making a substantial payment from the United Kingdom for an overspend that appears to be illegal, and is certainly contrary to assurances given to the House. Is there any way that we can have separate votes on new subsections (e) and (f), bearing in mind that they deal with wholly separate issues and that one involves a huge payment from the House of Commons for something which many hon. Members may consider to be wrong and some hon. Members may consider to be illegal?

Mr. Dennis Skinner: Further to that point of order. Sir Paul. Generally speaking, I believe that there should be separate votes. According to the press and statements made on television, during the past two or three weeks the Prime Minister has changed her mind about the Common Market, so why are we proceeding with this Bill? Has No. 10 Downing street made any representations to the Chair in line with what the Prime Minister has been saying while she has ben gallivanting round Europe? Why should we allocate money to the Common Market? We are told that Britain should no longer play any role that will lead towards a federal structure in Europe. If we are to provide the Community with cash, that will help those who want to take that route.
I want to know exactly what representations have been made by the Prime Minister—or is it that she has just been engaging in a bout of hypocrisy in her travels round the world, giving the impression that she is against the

Common Market when all the time she is assisting her Ministers, including the chairman of the Tory party, to come to this House and ask us to provide the Community with additional finance? It is high time the Prime Minister spoke with one voice and did not give misleading impressions to the public.

The First Deputy Chairman of Ways and Means (Sir Paul Dean): I am sure that the hon. Member for Bolsover (Mr. Skinner) realises that that point is not for me. The Bill has had its Second Reading and we are now proceeding to the Committee stage. Great consideration has been given to the selection of amendments, as is always the case, and it is never a straightforward matter on Bills of this sort. I can assure both hon. Gentlemen who raised these points and, indeed, the whole Committee, that a wide debate on clause stand part will be in order and that with a little ingenuity it will be possible to make most of the points which hon. Members wish to make.

Mr. Jonathan Aitken: Further to the point of order from the hon. Member for Bolsover (Mr. Skinner), Sir Paul. Although I can only condemn his aspersions on my right hon. Friend the Prime Minister, he is on to a significant argument—that to some extent there has been an important change in Government policy since we first debated the Bill. Will you, Sir Paul, ensure that the Government make a clear statement about why the Bill is needed? I need do no more than refer to the speech of my right hon. Friend the Paymaster General, who on 11 July at column 112 of Hansard with great enthusiasm endorsed the notion of the social fund and expenditure on it. Yet the Bruges speech of my right hon. Friend the Prime Minister appeared to condemn all that the social dimension stood for and all on which the social fund was spending the money which is at the heart of this Bill. My point of order in supporting the hon. Gentleman so uncharacteristically is simply to ask you to use your good offices to ensure that the Government make a clear statement of their new European policy.

Mr. Bob Cryer: Further to that point of order, Sir Paul. You slightly surprised me by suggesting that the Government do not change their mind over an issue. As my hon. Friend the Member for Bolsover (Mr. Skinner) said, the Prime Minister's speech seems to show a change of policy. I recall that on several occasions the Leader of the House has been to the Table, for example, about the Freedom of Information Bill which the Government allowed through several stages, but which was withdrawn in Committee because of circumstances surrounding Sir Anthony Blunt.
As the Prime Minister's statement appeared critical of the Common Market, the least we can expect of her is that she should send the Leader of the House here to make a statement of policy; otherwise, hon. Members may lay charges of hypocrisy against her, and I am not sure whether that is in order. Unless the Government make a statement about the Bill, the money it provides will go to support strong movements, both in the Assembly and in the Commission, towards a western European united states. That is the main thrust of thought and action in the Assembly of the Common Market.
It seems strange, Sir Paul, that you have heard nothing about such a statement. That is a poor show—the Prime Minister and the Leader of the House are accountable to


this House and should be here to make a statement. If they do not come, it cannot be helped if they are labelled hypocrites.

4 pm

The First Deputy Chairman: The two points that have been made are not really matters for the Chair; they are pleas for the Government to make statements. The sooner we get on with the Committee stage, the more likely we are to hear some answers to these points. I hope that we shall hear no more such points, because they are directed much more to the Treasury than to the Chair.

Mr. Nicholas Budgen: Further to this point of order, Sir Paul. May I, as a compromise, suggest that you call on the Paymaster General at an early stage? I am sure that there is neither populism nor duplicity nor ambiguity in the Prime Minister's position. I have no doubt that the Government will now say that they are opposed to the 80 per cent. increase in the social fund. It is absolutely certain that the Government are not prepared to allow the Labour party to become a Euro-fanatical party, using the social fund to enhance its interventionist and Socialist policies.
I know that the Paymaster General will want to state the Government's position at an early stage. May I therefore respectfully suggest that you, Mr. Deputy Speaker, call upon him immediately, thereby avoiding a long debate?

Mr. David Curry: Further to that point of order, Mr. Deputy Speaker. Some of us have the impression that there was a major change of heart by the Opposition during the summer. So that this affair is kept in balance, could the attention of the Labour Front Bench spokesmen be directed to explaining their conversion to the new policy that has overtaken their party, and could they inform their hon. Friends the Members for Bolsover (Mr. Skinner) and for Bradford, South (Mr. Cryer) about it?

The First Deputy Chairman: It is clear that the suggestions that have been made recently are most helpful. Everyone is anxious to hear what the Paymaster General has to say about the Bill, and I seriously suggest to the Committee that the sooner we start to debate the amendments that have been selected, the sooner we are likely to hear from him.

Mr. Ian Gow: Further to that point of order, Sir Paul. There has been a singular harmony between the two sides of the Committee. I rise to support the suggestion made by the hon. Member for Bolsover (Mr. Skinner) and by my hon. Friend the Member for Thanet, South (Mr. Aitken).
My point of order is this: since the Bill was given a Second Reading, three dramatic events, both highly relevant to the Bill, have occurred. The first was the speech by my right hon. Friend the Prime Minister at Bruges, a copy of which even found its way into the hands of my right hon. Friend the Minister of State, Foreign and Commonwealth Office, who produced it at the Dispatch Box last week. There was also the rebuke delivered to the Prime Minister by my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath), who is unaccountably

not in his place today. If he were here, I am sure he would want to be the lone voice in the House disagreeing with the speech made by my right hon. Friend the Prime Minister.
The other event of great importance was the visit of the chairman of the European Commission to the Labour party conference—

Mr. Skinner: As chairman of the Labour party, I can tell the hon. Gentleman that there was no such visit.

Mr. Gow: I apologise to the hon. Gentleman. The chairman of the European Commission made a journey to the TUC, not the Labour party.
Taking all these matters together, I wonder whether you, Sir Paul, might exceptionally allow my right hon. Friend the Paymaster General to speak first in the debate? There may be only a few precedents for that, but the exceptional nature of the events since Second Reading of this Bill justify a departure from precedent.
We should also welcome advice from my right hon. Friend upon one other matter. What would happen if the Bill did not receive a Third Reading? I think there is a growing recognition in the Conservative party that we should not continue this open-ended commitment of our taxpayers' money to the extravagances—sometimes quasi-Socialist extravagances—of the European Community. Will you, Sir Paul, allow my right hon. Friend to address the Committee first

Mr. Ron Leighton: Further to that point of order, Sir Paul. You will have noticed that there is some confusion in the House. I thought at first that I was the only person who was confused, but it would appear that the confusion is more widespread.
There appears to be a prima facie difference between the remarks made by the Paymaster General last time he addressed the House and the Prime Minister's remarks on her European tour. It sems that she was saying that she is against the effects of the Single European Act—perhaps she did not understand it when she guillotined it through the House. It would be quite wrong and unparliamentary to accuse her of hypocrisy, so we must assume that she meant what she said at Bruges: that she was against a supranational Europe and an integration of British affairs into such a Europe. That being so, she would presumably not support a Bill giving money for the very policies that she opposed at Bruges. All this has caused some confusion, and I, too, am anxious that the Paymaster General should clear it up.
How will the right hon. Gentleman do this? He will not do so by speaking to an amendment. I hope he will make a short ministerial statement to put us all in the picture.

The First Deputy Chairman: This is developing into a debate on the merits and demerits of the European Community and the attitude to it of various political parties. That is not in order under the guise of points of order.
There have been many pleas from both sides of the House for the Paymaster General to make the Government's view clear. Again, I suggest that we are much more likely to get clarification from the Government when we get on to the amendments.
As regards the other point, we should be much wiser to follow normal precedents and get on with the


amendments. As soon as the Paymaster General rises—if he does—to speak to any of the amendments, he will as usual be called by the Chair.

Mr. Budgen: rose—

Mr. Skinner: rose—

Mr. Cryer: rose—

Mr. Teddy Taylor: rose—

Mr. Budgen: Further to these points of order, Sir Paul. May I suggest another compromise to try to encompass the will of the House? It is plain that the House anticipates a significant statement from the Paymaster General. As we have come to expect absolute consistency from the Government, it is obvious that he will make a statement that will transform our relations with the EEC. May I suggest that he be called first to make that statement?
As that is likely to render all the amendments to the Bill completely otiose, you, Sir Paul, may consider adjourning the Committee as soon as the Paymaster General has finished speaking. If it is then thought that he speaks, although with great authority, not with the same authority as the Prime Minister does, that would give the Prime Minister an opportunity to make her statement to the House. Sadly, when she made her Bruges speech she was unable to express her views to the House as well as she was to the popular newspapers.
Perhaps, once the Paymaster General has spoken, all criticism will be silenced, but in the unlikely event of that happening I suggest that it would be the will of the Committee generally that there should be an Adjournment.

Mr. Cryer: Further to that point of order, Sir Paul. I have looked through the explanatory and financial memorandum to the Bill and I find no explanation of the extent of loss of sovereignty by the House. With the continuing erosion of the powers of the House and the transfer of powers to the bureucrats in Brussels, it would be a great help if you would arrange for a report of these discussions to be brought to the attention of the Procedure Committee. It is about time that Members of the House and the public outside, who have been misled about the reality of the Prime Minister's speech—that sovereignty is being eroded by statutory instruments, by the Single European Act and now by this Bill—knew what was happening.
It would assist the procedures of the House immeasurably if an assessment was made of the loss of sovereignty and either you, Sir Paul, or Mr. Speaker made a statement before we considered such legislation. It is the job of the Chair above all to protect the rights and privileges of the House. Before every stage of a Bill dealing with the Common Market there should be a statement from the Chair. You have seen this afternoon that hon. Members on both sides of the Committee are worried about the matter. The Leader of the House has made no representations to come here. The Prime Minister has made no statement of her views on the Common Market. We know that Ministers are completely subservient to the whims of the Prime Minister, and on any objective assessment it must be vital to have a further examination of the legislation. I should have thought that you, Sir Paul, should undertake that.
It might be better—the suggestion has already been made by a Conservative Member—if the Committee was adjourned so that you, Sir Paul, and Mr. Speaker could consider the matter urgently. The important thing about the House is that it acts as a platform so that people can know what is going on. If matters are cloaked in rhetoric about standing firm against the Common Market, when the House is conceding more money in Bill after Bill, the people outside should have an authoritative assessment of the loss of sovereignty under this legislation. You could give that authoritative assessment from the point of view of protecting the rights and privileges of Parliament which have been built up through blood, sweat and tears over many years.
I have asked you to consider an important task, Sir Paul, and I suggest that we adjourn.

Mr. Teddy Taylor: Further to that point of order, Sir Paul. Although I have no way of knowing whether the Prime Minister will be voting for or against the Bill in view of her Bruges speech, may I appeal to you, Sir Paul, to give us some idea of what the House should do tonight when voting? Two matters are before us: first, the proposal to give a great deal of cash to the Common Market in all future years; and, secondly, a proposal in new sub-paragraph (f) to pay £765 million immediately to cover overspending in the past. Is there no way in which hon. Members who are against paying that huge additional sum for the overspend will be able to express their views? The House must have a duty to control cash. We talk about child benefit, which involves a much smaller sum. When there is an overspend, which we were assured would not happen, Members of the House should be able to vote for or against it. They should also be able to vote for or against giving much more money to the Common Market for future years.
To take amendment No. 10 as an example, is it not right that we should have the opportunity of saying yes or no to what appear to be two separate decisions taken on two separate occasions by separate bodies in the EC? If the House is to exercise its judgment on financial matters, it must have separate votes. That could be done if one of the amendments that was not selected was reconsidered.

Mr. Skinner: Further to that point of order, Sir Paul. I agree that the £765 million and the other sums of money should be decided by the House in separate votes. During the past few days I have listened to hon. Members on both sides of the House clamouring for compensation for people who lost considerable amounts with Barlow Clowes. There will be a call from the Opposition for child benefit to be uprated, yet here we are talking about £765 million being thrown down the drain—being allocated to the bureaucrats in Brussels to oil the wheels of the gravy trains. The money would be better given to people with children in Britain. It would be folly indeed if we could not have separate votes on those matters.
This is a discussion about one set of statements made by the Head of Government and another set of statements being made in Parliament. That does not happen often. Parliament is being asked, or behalf of the Prime Minister. to consider proposals that she is purported to be solidly against—certainly in her gallivanting trips round the world. It is high time that we had a statement from the chairman of the Tory party, and as chairman of the


Labour party I ask him to make a short statement saying that changes have been made in Government policy since the recess. The Bill should be abandoned and we should have the opportunity in the near future to repeal the Single European Act, which is the mother and father of this sort of legislation.
We cannot have the Prime Minister trotting round saying one thing and then telling Ministers to come to Parliament and do the opposite. The Minister should make it clear today that the Bill will be abandoned and that we shall retrace the steps of Common Market legislation, which has been an unmitigated disaster for the British people.

Mr. Marlow: On a point of order, Sir Paul.

Mr. Aitken: On a point of order, Sir Paul.

The First Deputy Chairman: Order. The Committee has had a good run on this. No new points have been made that I have not already answered, and it is an abuse of points of order to attempt to debate the merits of the European Community or to go back on a Bill that has received its Second Reading. I have deliberately given the Committee a good run, but it is becoming an abuse of our proceedings. We must get on with the amendments.

Mr. Aitken: rose—

Mr. Marlow: rose—

The First Deputy Chairman: Order. I call Mr. Aitken.

Mr. Aitken: On a point of order, Sir Paul. May I draw your attention to the Bill, which states that its entire purpose is
to make payments to finance the Communities' general budget for the financial year 1988",
because on that sentence the entire edifice of the legislation that we are about to discuss is to be debated?
There have been other major events since we began our deliberations on this legislation. During the summer recess, the European Community came up with a new set of figures. To those of us who have followed the simple process of addition and subtraction as conducted by the European Community, it is no surprise to find that once again the Community has got its figures wrong, this time on what might be described as the encouraging side of the balance sheet.
I draw your attention, Sir Paul, to a headline in Saturday's Financial Times, which runs:
EC to save £2·47 bn. on budget".
The article continues by pointing out all the savings that have been made. On the revenue side, the Community is expected to end this year with a 2 billion ecu surplus, which is attributed to factors such as the summer drought in the United States, which has driven down world food prices.
My point of order is that here we are debating legislation to increase by a massive 25 per cent. the resources that are available to the European Community yet the very purpose for which this legislation was introduced has fallen away. The European Community now has plenty of money for the purposes decided. Of course, it now wants to spend the extra money on a range of new policies which, I would suggest, are unacceptable to this House. When my right hon. Friend the Paymaster General makes his statement which, if it is a speech of

repentance, will be one of the greatest political spectacles since Cranmer thrust his right hand into the flames, we look forward enormously to having an explanation of how the sums have gone wrong all over again and how we are now voting to the European Community money which is not required. We also want an explanation of what the money is needed for.

Several Hon. Members: rose—

The First Deputy Chairman: Order. We cannot have interventions in points of order.
The hon. Member for Thanet, South (Mr. Aitken) is now anticipating the speech that he would hope to make on clause stand part when we eventually get there. We have had a preview, but we must now get on with the business before the House.

Several Hon. Members: rose—

Mr. John McFall: I rise to support the proposition made by the hon. Member for Wolverhampton, South-West (Mr. Budgen) that the House should adjourn. The problem is the Single European Act. Hon. Members said that presumably the Prime Minister knew what she was doing when she signed it. I suggest in the light of her Bruges speech that she did not know what she was doing. With due respect, we do not want the monkey, we want the organ grinder so that the confusion can be settled once and for all.

Mr. Budgen: On a new point of order, Sir Paul.

The First Deputy Chairman: I call Mr. Marlow.

Mr. Marlow: I wonder if you can help the House, Sir Paul, by giving two quick rulings? First, if my right hon. Friend the Paymaster General wishes to give a statement, would you agree to his giving a statement because that would clear up a great deal of confusion about the problem that exists at the moment? If you would agree to that, I am sure that my right hon. Friend will be only too happy to do so, so perhaps you could state your view on that when I sit down.
Secondly, Sir Paul, you kindly said—we are very grateful—that under clause stand part you will allow a wide-ranging debate. My hon. Friend the Member for Southend, East (Mr. Taylor) and chairman Dennis, the hon. Member for Bolsover (Mr. Skinner), have both said that we should be entitled to have separate votes on the two separate issues. Will you allow the Committee the privilege of looking into the recesses of your mind as to whether it is possible to have those two separate votes?

Several Hon. Members: rose—

Mr. Budgen: On a new point of order, Sir Paul.

The First Deputy Chairman: Order. The points being raised are not new points of order—

Mr. Budgen: With great respect, you do not know, Sir Paul.

The First Deputy Chairman: These points have been raised before, and I have done my best to answer them. The Committee stage of the Bill is in order; otherwise it would not be set down for debate today and the sooner we get on with the debate, the more likely we are to get the statements from the Government which have been demanded from both sides of the Committee.
As I told the Committee right at the beginning, careful consideration has been given to the selection of amendments. I have listened carefully to what has been said but nothing has been said to alter in any way my judgment about the selection of amendments.

Mr. Budgen: With great respect—

The First Deputy Chairman: I call Mr. Leighton.

Mr. Leighton: My difficulty, which has not been cleared up yet, is that I do not know whether the Prime Minister will vote for the Bill. I do not know whether the Prime Minister supports the Bill. I studied her speech in Bruges carefully—I know that it happened outside the House and that it was in the recess—and I give her the benefit of the doubt and assume that she meant what she said. If she did mean what she said, she will not support the Bill, which puts us in some difficulty if we are to spend our time discussing amendments without knowing whether the First Lord of the Treasury supports the Bill. We have asked for some clarification before we start on the detail of the amendments. We want a simple statement from the incumbent of the Treasury Bench to clear up this matter. Do the Government have a united view? Is what the Paymaster General said the last time he addressed the House the Government's policy, or should the Bruges speech be considered Government policy? We are still in difficulty.

Mr. Budgen: With great respect—

The First Deputy Chairman: Order.

Mr. Budgen: This is a new point of order—

The First Deputy Chairman: Order. Committee procedures are well established and I am sure that the whole Committee is eagerly awaiting the speech of the hon. Member for Newham, South (Mr. Spearing), who will move the first group of amendments. The sooner we get on to that—

Mr. Budgen: rose—

The First Deputy Chairman: Order. The sooner we get on, the sooner we shall hear from the Treasury Bench.

Mr. Budgen: rose—

The First Deputy Chairman: Order. I am not taking any further points of order. I have allowed a good run on points of order.

Mr. Budgen: It is a new point of order.

The First Deputy Chairman: Order. I have dealt with the points which have been raised.

Clause 1

EXTENDED MEANING OF "THE TREATIES" AND "THE COMMUNITY TREATIES"

Mr. Spearing: I beg to move amendment No. 13, in page 1, line 17, at end insert—
(2) the terms of the decision of the Council and the undertaking by representatives of governments of 24th June 1988 are as set out in Schedules 1 and 2 respectively to this Act.'.

The First Deputy Chairman: With this it will be convenient to discuss the following amendments: No. 14—new schedule—

'SCHEDULE 1

DECISION OF THE COUNCIL OF THE EUROPEAN COMMUNITIES ON THE SYSTEM OF THE COMMUNITIES' OWN RESOURCES

Luxembourg, 24 June 1988

The Council of the European Communities,

Having regard to the Treaty establishing the European Economic Community, and in particular Articles 199 and 201 thereof1,

Having regard to the Treaty establishing the European Atomic Energy Community, and in particular Articles 171( 1) and 173 thereof2,

Having regard to the proposal from the Commission3,

Having regard to the Opinion of the European Parliament4,

Having regard to the Opinion of the Economic and Social Committee5,

Whereas Council Decision 85/257/EEC/Euratom of 7 May 1985 on the Communities' system of own resources6, as last amended by the Single Europan Act, raised to 1·4 per cent. the limit for each Member State on the rate applied to the uniform value added tax (VAT) base previously set at 1 per cent. by the Council Decision of 21 April 1970 on the replacement of financial contributions from Member States by the Communities' own resources7 hereinafter referred to as "the Decision of 21 April 1970";

Whereas the resources available within the limit of 1·4 per cent. are no longer suffcient to cover the estimates of Community expenditure;

Whereas the Single European Act8 opens up new possibilities to the Community; whereas Article 8a of the Treaty establishing the European Economic Community provides for the completion of the internal market by 31 December 1992;

Whereas the Community must possess stable and guaranteed revenue enabling it to stabilize the present situation and operate common policies; whereas this revenue must be based on the expenditure deemed necessary to this end which was determined in the financial estimates in the Interinstitutional Agreement between the European Parliament, the Council and the Commission, which will take effect on 1 July 1988;

Whereas the European Council meeting in Brussels on 11, 12 and 13 February 1988 reached certain conclusions;

Whereas, in accordance with these conclusions, the Community will, by 1992, be assigned a maximum amount of own resources corresponding to 1·2 per cent. of the total of the Member States' gross national product for the year at market prices, hereinafter referred to as "GNP";

Whereas observance of this ceiling requires that the total amount of own resources at the Community's disposal for the period 1988 to 1992 does not in any one year exceed a specified percentage of the sum of the Community's GNP for the year in question; whereas that percentage shall correspond to application of the guidelines established for growth in Community expenditure as laid down in the European Council conclusions concerning budgetary discipline and budget management, and a safety margin of 0·03 per cent. of Community GNP aimed at coping with unforeseen expenditure;

Whereas a global ceiling of 1·30 per cent. of the Member States' GNP is set for commitment appropriations; whereas an orderly progression of commitment appropriations and payment appropriations must be ensured;

Whereas these ceilings should remain applicable until this Decision is amended;

Whereas, with a view to matching the resources paid by each Member State more closely with its ability to contribute, the composition of Community own resources should be amended and enlarged: whereas it is necessary for this purpose:

—to fix at 1·4 per cent. the maximum rate to be applied to each Member State's uniform base for value added tax, limited where appropriate to 55 per cent. of its GNP;
—to introduce an additional type of own resource to balance budget revenue and expenditure, based on


the sum of Member States' GNP; for this purpose, the Council will adopt a Directive on the harmonisation of the compilation of Gross National Product at market prices;

Whereas the customs duties on products coming under the Treaty establishing the European Coal and Steel Community' should be included in Community own resources;

Whereas the conclusions of the European Council of 25 and 26 June 1984 on the correction of budgetary imbalances continue to apply for the duration of this Decision's validity; whereas the present compensation mechanism must, however, be adjusted to take account of the capping of the VAT base and the introduction of an additional resource and must provide for financing of the correction on the basis of a GNP key; whereas this adjustment should ensure that the VAT share of the United Kingdom is replaced by its share of payments under the third and fourth resources (those provided by VAT and GNP respectively) and that the effect on the United Kingdom, in respect of a given year, of the capping of the VAT base and of the introduction of the fourth resource which is not compensated by this change will be offset by an adjustment to the compensation in respect of that year; whereas the contributions of Spain and Portugal should be reduced in accordance with the rebates provided for in Articles 187 and 374 of the 1985 Act of Accession2,

Whereas the budgetary imbalances should be corrected in such a way as not to affect the own resources available for the Community's policies;

Whereas the conclusions of the European Council of 11, 12 and 13 February 1988 provided for the creation, in the Community budget, of a monetary reserve, hereinafter referred to as the "EAGGF monetary reserve", to offset the impact of significant and unforseen fluctuations in the ECU/dollar parity on the expenditure under the Guarantee Section of the European Agricultural Guidance and Guarantee Fund (EAGGF); whereas that reserve should be covered by specific provisions;

Whereas provisions must be laid down to cover the changeover from the system introduced by Decision 85/257/EEC/Euratom to that arising from this Decision;

Whereas the European Council of 11, 12 and 13 February 1988 provided that this Decision should take effect on 1 January 1988,

Has laid down these provisions, which it recommends to the Member States for adoption:

ARTICLE I

The Communities shall be allocated resources of their own in accordance with the following Articles in order to ensure the financing of their budget.

The budget of the Communities shall, irrespective of other revenue, be financed entirely from the Communities' own resources.

ARTICLE 2

1. Revenue from the following shall constitute own resources entered in the budget of the Communities:

(a) levies, premiums, additional or compensatory amounts, additional amounts or factors and other duties established or to be established by the institutions of the Communities in respect of trade with non-member countries within the framework of the common agricultural policy, and also contributions and other duties provided for within the framework of the common organization of the markets in sugar;
(b) Common Customs Tariff duties and other duties established or to be established by the institutions of the Communities in respect of trade with non-member countries and customs duties on products coming under the Treaty establishing the European Coal and Steel Community;
(c) the application of a uniform rate valid for all Member States to the VAT assessment base which is determined in a uniform manner for Member States according to Community rules; however, the assessment base for any Member State to be taken into account for the purposes of this Decision shall not exceed 55 per cent. of its GNP;

(d) the application of a rate—to be determined under the budgetary procedure in the light of the total of all other revenue—to the sum of all the Member States' GNP established in accordance with Community rules to be laid down in a Directive adopted under Article 8(2) of this Decision.

2. Revenue deriving from any new charges introduced within the framework of a common policy, in accordance with the Treaty establishing the European Economic Community or the Treaty establishing the European Atomic Energy Community, providing the procedure laid down in Article 201 of the Treaty establishing the European Economic Community or in Article 173 of the Treaty establishing the European Atomic Energy Community has been followed, shall also constitute own resources entered in the budget of the Communities.

3. Member States shall retain, by way of collection costs, 10 per cent. of the amounts paid under 1(a) and 1(b).

4. The uniform rate referred to in 1(c) shall correspond to the rate resulting from:

(a) the application of 1·4 per cent. to the VAT assessment base for Member States, and
(b) the deduction of the gross amount of the reference compensation referred to in Article 4(2). The gross amount shall be the compensation amount adjusted for the fact that the United Kingdom is not participating in the financing of its own compensation and the Federal Republic of Germany's share is reduced by one third. It shall be calculated as if the reference compensation amount were financed by Member States according to their VAT assessment bases established in accordance with Article 2(1)(c). For 1988. the gross amount of the reference compensation shall be reduced by 780 MECU.

5. The rate fixed under paragraph 1(d) shall apply to the GNP of each Member State.

6. If, at the beginning of the financial year, the budget has not been adopted, the previous uniform VAT rate and rate applicable to Member States' GNP, without prejudice to whatever provisions may be adopted in accordance with Article 8(2) by reason of the entry of an EAGGF monetary reserve in the budget, shall remain applicable until the entry into force of the new rates.

7. By way of derogation from 1(c), if, on 1 January of the financial year in question, the rules for determining the uniform basis for assessing VAT are not yet applied in all the Member States, the financial contribution which a Member State not yet applying this uniform basis is to make to the budget of the Communities in lieu of VAT shall be determined according to the proportion of its gross national product at market prices to the sum total of the gross national product of the Member States at market prices in the first three years of the five-year period preceding the year in question. This derogation shall cease to have effect as soon as the rules for determining the uniform basis for assessing VAT are applied in all Member States.

8. For the purposes of applying this Decision, GNP shall mean gross national product for the year at market prices.

ARTICLE 3

1. The total amount of own resources assigned to the Communities may not exceed 1·20 per cent. of the total GNP of the Community for payment appropriations.

The total amount of own resources assigned to the Communities may not, for any of the years during the 1988–1992 period, exceed the following percentages of the total GNP of the Community for the year in question:

1988 : 1·15
1989 : 1·17
1990 : 1·18
1991 : 1·19
1992 : 1·20

2. The commitment appropriations entered in the general budget of the Communities over the period 1988–1992 must follow an orderly progression resulting in a total amount which does not exceed 1·30 per cent. of the total GNP of the Community in 1992. A precise ratio between commitment appropriations and payment appropriations shall be


maintained to guarantee their compatibility and to enable the ceiling mentioned in paragraph 1 to be observed in subsequent years.

3. The overall ceilings referred to in paragraphs 1 and 2 shall continue to apply until such time as this Decision is amended.

ARTICLE 4

The United Kingdom shall be granted a correction in respect of budgetary imbalances. This correction shall consist of a basic amount and an adjustment. The adjustment shall correct the basic amount to a reference compensation amount.

1. The basic amount shall be established by:

(a) calculating the difference, in the preceding financial year, between:

—the percentage share of the United Kingdom in the sum total of the payments referred to in Article 2(1)(c) and (d) made during the financial year, including adjustments at the uniform rate in respect of earlier financial years, and
—the percentage share of the United Kingdom in total allocated expenditure;
(b) applying the difference thus obtained to total allocated expenditure;
(c) multiplying the result by 0·66.

2. The reference compensation shall be the correction resulting from application of (a), (b) and (c) below, corrected by the effects arising for the United Kingdom from the changover to capped VAT and the payments referred to in Article 2(1)(d).

It shall he established by:

(a) calculating the difference, in the preceding financial year, between:

—the percentage share of the United Kingdom in the sum total of VAT payments which would have been made during that financial year, including adjustments in respect of earlier financial years, for the amounts financed by the resources referred to in Article 2(1)(c) and (d) if the uniform VAT rate had been applied to non-capped bases, and
—the percentage share of the United Kingdom in total allocated expenditure;
(b) applying the difference thus obtained to total allocated expenditure;
(c)—multiplying the result by 0·66;
(d)—subtracting the payments by the United Kingdom taken into account in the first indent of 1(a) from those taken into account in the first indent of 2(a);
(e) subtracting the amount calculated at (d) from the amount calculated at (c).

3. The basic amount shall be adjusted in such a way as to correspond to the reference compensation amount.

ARTICLE 5

1. The cost of the correction shall be borne by the other Member States in accordance with the following arrangements:
the distribution of the cost shall first be calculated by reference to each Member State's share of the payments referred to in Article (2)(1)(d), the United Kingdom being excluded; it shall then be adjusted in such a way as to restrict the share of the Federal Republic of Germany to two thirds of the share resulting from this calculation.

2. The correction shall be granted to the United Kingdom by a reduction in its payments resulting from the application of Article 2(1)(c). The costs borne by the other Member States shall be added to their payments resulting from the application for each Member State of Article 2(1)(c) up to a 1·4 per cent. VAT rate and Article 2(1)(d).

3. The Commission shall perform the calculations required for the application of Article 4 and this Article.

4. If, at the beginning of the financial year, the budget has not been adopted, the correction granted to the United Kingdom and the costs borne by the other Member States as entered in the last budget finally adopted shall remain applicable.

ARTICLE 6

The revenue referred to in Article 2 shall be used without

distinction to finance all expenditure entered in the budget of the Communities. However, the revenue needed to cover in full or in part the EAGGF monetary reserve, entered in the budget of the Communities, shall not be called up from the Member States until the reserve is implemented. Provisions for the operation of that reserve shall be adopted as necessary in accordance with Article 8(2).

The preceding subparagraph shall be without prejudice to the treatment of contributions by certain Member States to supplementary programmes provided for in Article 130 1 of the Treaty establishing the European Economic Community.

ARTICLE 7

Any surplus of the Communities' revenue over total actual expenditure during a financial year shall be carried over to the following financial year. However, any surplus generated by a transfer from EAGGF Guarantee chapters to the monetary reserve shall he regarded as constituting own resources.

ARTICLE 8

1. The Community own resources refered to in Article 2(1)(a) and (b) shall be collected by the Member States in accordance with the national provisions imposed by law, regulation or administrative action, which shall, where appropriate, be adapted to meet the requirements of Community rules. The Commission shall examine at regular intervals the national provisions communicated to it by the Member States, transmit to the Member States the adjustments it deems necessary in order to ensure that they comply with Community rules and report to the budget authority. Member states shall make the resources under Article 2(1)(a) to (d) available to the Commission.

2. Without prejudice to the auditing of the accounts and to checks that they are lawful and regular and as laid down in Article 206a of the Treaty establishing the European Economic Community, such auditing and checks being mainly concerned with the reliability and effectiveness of national systems and procedures for determining the base for own resources accruing from VAT and GNP and without prejudice to the inspection arrangements made pursuant to Article 209(c) of that Treaty, the Council shall, acting unanimously on a proposal from the Commission and after consulting the European parliament, adopt the provisions necessary to apply this Decision and to make possible the inspection of the collection, the making available to the Commission and payment of the revenue referred to in Article 2 and in Article 5.

ARTICLE 9

The mechanism for the graduated refund of own resources accruing from VAT or GNP-based financial contributions introduced for the Kingdom of Spain and the Portuguese Republic up to 1991 by Articles 187 and 374 of the 1985 Act of Accession shall apply to the own resources accruing from VAT and the GNP-based resource referred to in Article 2(1)(c) and (d) of this Decision. It shall also apply to payments by these two member States in accordance with Article 5(2) of this Decision. In the latter case the rate of refund shall be that applicable for the year in respect of which the correction is granted.

ARTICLE 10

The Commission shall submit, by the end of 1991, a report on the operation of the system, including a re-examination of the correction of budgetary imbalances granted to the United Kingdom, established by this Decision.

ARTICLE 11

1. Member States shall be notified of this Decision by the Secretary-General of the Council of the European Communities, it shall be published in the Official Journal of the European Communities.

Member States shall notify the Secretary-General of the Council of the European Communities without delay of the completion of the procedures for the adoption of this Decision in accordance with their respective constitutional requirements.

This Decision shall enter into force on the first day of the month following receipt of the last of the notifications referred to in the second subparagraph. It shall take effect on I January 1988.

2. (a) Subject to (b) and (c), Decision 85/257/EEC/Euratom shall be repealed as of 1 January 1988. Any references to the Decision of 21 April 1970 or to Decision 85/257/EEC/Euratom shall be construed as references to this Decision.

(b) Article 3 of Decision 85/257/EEC/Euratom shall continue to apply to the calculation and adjustment of revenue accruing from the application of rates to


the uncapped uniform assessment basis for value added tax in 1987 and earlier years. For 1988 the deduction in favour of the United Kingdom in respect of previous financial years shall be calculated in accordance with points (b)(i), (ii) and (iii) of Article 3(3) of the said Decision. The distribution of the cost of financing it shall be calculated in accordance with Article 5(1) of this Decision. The amounts corresponding to the deduction and the distribution of the cost of financing it shall be dealt with in accordance with Article 5(2) of this Decision. When Article 2(7) has to be applied, the value added tax payments shall be replaced by financial contributions in the calculations referred to in this paragraph for any member State concerned; this system shall also apply to the payment of adjustment of corrections for earlier years.
(c) Article 4(2) of Decision 85/257/EEC/Euratom shall continue to apply to the financial contributions needed to finance the completion of the supplementary programme for the operation of the HFR reactor of 1984–1987.

1 Treaty Series No. 15 (1979), Cmnd. 7460.
2 Treaty Series No. 17 (1979), Comn. 7462.
3 OJ No. C 102, 16.4.1988, p.8.
4 Opinion delivered on 15 June 1988 (not yet published in the Official Journal).
5 Opinion delivered on 27 April 1988 (not yet published in the Official Journal).
6 OJ No L 128, 14.5.1985, p. 15
7 OJ No L 94, 28.4.1970, p.19.
8 Treaty Series No. 31 (1988), Cm 372.
9 Treaty Series No. 16 (1979), Cmnd. 7461.
10 European Communities No. 27 (1985), Cmnd. 9634."

No. 15—new schedule—

SCHEDULE 2

UNDERTAKING AS CONFIRMED BY THE REPRESENTATIVES OF THE GOVERNMENTS OF THE MEMBER STATES OF THE EUROPEAN COMMUNITIES MEETING WITHIN THE COUNCIL TO MAKE PAYMENTS TO FINANCE THE COMMUNITIES GENERAL BUDGET

FOR THE FINANCIAL YEAR 1988

Luxembourg, 24 June 1988

INTERGOVERNMENTAL AGREEMENT

1. Following the conclusions of the European Council of 11 to 13 February 1988, the Representatives of the Governments of the Member States, meeting within the Council, hereby undertake to pay the Community to balance the 1988 budget an amount which will not exceed

7 113 737 522 ECU.

This amount is distributed among Member States as follows:

Amounts excluding the monetary reserve
Amounts in respect of the monetary reserve
Total


Belgium
215 705 631
34 310 784
250 016 415


Denmark
146 490 121
23 329 191
169 819 312


Germany
1 457 922 419
270 763 248
1 728 685 667


Greece
71 115 661
11 517 281
82 632 942


Spain
426 449 594
72 130 322
498 579 916


France
1 228 885 493
209 185 969
1 438 071 462


Ireland
35 684 063
61 60 406
41 844 469


Italy
1 118 527 881
183 312 263
1 371 840 144


Luxembourg
11 962 066
2 062 397
14 024 463


Netherlands
303 793 184
50 461 763
354 254 947


Portugal
53 704 695
8 651 353
62 356 048


United Kingdom
929 066 793
172 544 944
1 101 611 737


TOTAL
6 069 307 601
1 044 429 921
7 113 737 522

2. The amounts paid by each Member State constitute non-repayable advances on the payments due after the entry into force of the Decision on own resources.

3. These amounts shall be paid in monthly instalments. The conversion rate to be applied to these payments shall correspond to

that laid down for the payment of own resources originating from VAT.

4. The Representatives of the Governments of the Member States note that the resources necessary to cover additional expenditure of monetary origin (=Monetary reserve) will be payable only after approval of the transfer of appropriations to the operational headings of the EAGGF Guarantee Section affected by the depreciation of the dollar, and will be limited to the amount of the appropriations transferred.

5. The Representatives of the Governments of the Member States note that the payment of amounts pursuant to this undertaking requires certain internal procedures to be completed 1.

1 Twelve delegations state that "internal procedures" involve parliamentary approval.'

Mr. Spearing: I am in an unaccustomed place in the Chamber because, as hon. Members know, Committee stage is, quite properly, more of an ordered conversation than a grand debate, and being in this place allows that facility.
My thanks go to you, Sir Paul, for selecting this amendment. Although it may have been thought that there would not be any selections in this debate, other than clause stand part, we owe that to one of our esteemed predecessors who, when the European Communities Act 1972 was being debated, allowed no fewer than 14 hours on points of order. As a result, we know something about amendments that are in order and about those that are not in order in respect of deliberately, tightly framed Bills, such as this. Alas—

Mr. Budgen: rose—

Mr. Spearing: In a minute.
Alas, because this is a relatively narrow amendment with narrow terms of reference, even if the Paymaster General catches your eye, Sir Paul, I do not think that he will be able to satisfy either my hon. Friends or those Conservative Members who have been asking for a statement.

Mr. Cryer: rose—

Mr. Spearing: In a minute.
As I understand it, there is a lacuna in procedure because if we were in Committee and a Minister had made a speech about the Bill then before the Committee which threw a question mark on the purposes and objectives of Her Majesty's Government or on the money that was to be voted for those objectives and purposes, the Government's representatives would have made a statement with alacrity on a point of order at the beginning of the proceedings to clarify matters. I very much regret that that cannot happen until we get to clause stand part, because I think you will agree, Sir Paul, that the subject of my technical but important amendment does not allow such a facility to occur.

Mr. Budgen: Does the hon. Gentleman know whether the Leader of the Opposition proposes to make a speech on clause stand part? It is obvious that the increase in the regional and social fund provides the Labour party with a wonderful opportunity to bring forward proposals for Socialist and interventionist measures that would completely subvert or bypass the will of the nation in electing a Conservative Government. As the right hon. Member for Islwyn (Mr. Kinnock) has now attacked the Conservative Government for being reluctant in Europe, I


expect that he wishes to proclaim his new allegiance to a supernational authority which will prevent the will of the people as expressed in the last general election.

The First Deputy Chairman: Order. We must stick to amendment No. 13.

Mr. Spearing: I repeat what you have just said to the hon. Member for Wolverhampton, South-West (Mr. Budgen), Sir Paul—that that is not within the ambit of my amendment.

Mr. Cryer: My hon. Friend is describing his difficulties in proceeding on this narrow but important amendment. Does he agree that much of the discussion at the beginning of the debate would have been helped if amendment No. 8 had been selected? We could then have had a discussion. As we have been gagged in seeking to make further points of order, will my hon. Friend consider suggesting to you, Sir Paul, that you have another look at the selection of amendments so that amendment No. 8, which is about sovereignty, is re-examined?

The First Deputy Chairman: Order. I am sure that the hon. Member for Newham, South (Mr. Spearing) will not be tempted along that road and that he will stick to his amendments.

Mr. Spearing: I heed what you say, Sir Paul, and say only that amendment No. 3 attempted to separate two aspects that we shall now debate.
This is a money Bill, for the payment of very substantial sums of money over the next five years, automatically and without further vote. That money will further the aims and purposes of the European Economic Community, including those outlined—and which are controversial—in the Single European Act, which is an amendment to the treaty of Rome. Therefore, the power that is involved is being taken in the Bill, but the amendment relates to the mechanisms and the details of the calculations of that payment. At the moment they have not been made explicit in the Bill.
The Bill attaches two treaties to those listed in the current version of the European Communities Act 1972, in section 2(1). That Act names various treaties that form part of what we now have as the constitution of the European Union. It does so just by naming the treaties which are before us, and which are named in new sub-paragraphs (e) and (f). The first is a decision, which is Cm. 419, a substantial document that outlines the ways in which our contributions to the EEC will be calculated between now and 1992. New sub-paragraph (f) relates to a much thinner, one-page document, Cm. 418, which describes a payment that should or can be made this year.
I think that it is in order to ask the Minister, in view of what he said on Second Reading, whether moneys have already been paid, as he said they may be under the contingencies fund, on the assumption that the Bill would be passed.

Mr. Marlow: The hon. Gentleman is being unduly modest about the scope of his amendments. He said that he would like the Minister to make a statement early on. In his amendments he seeks to introduce schedules 1 and 2 into the Bill. They are the meat; that is what is going on. Article 3 of schedule 1 refers to increasing the Community's own resources in 1988, 1989, 1990, 1991 and

1992, by given factors. Schedule 2 refers to the exact amount of money that member states will be liable to pay the Community.
I am sorry that the hon. Gentleman is so modest, but his amendments are the guts of the Bill. If my right hon. Friend the Minister wished to make a detailed speech on the Government's philosophy, it would be in order. I am sure that you would have ruled me out of order, Sir Paul, if that were not so.

Mr. Spearing: I am grateful to the hon. Gentleman for his compliments, but he has got it slightly wrong. My amendment No. 13 is but a coupling hook to make clear the contents of the two coaches that the Government are to attach to the railway train. I want a little glasnost. All that the Bill does is say that the decision and the undertaking shall be part of the 1972 Act. What the Bill does not say is what is in the contents of that decision and undertaking.
Any hon. Member could go to the Vote Office—hon. Members may have gone last week, for all I know—and ask for those documents. They may or may not have got them. When the Bill is enacted and people want to know under what obligations we stand and what are the calculations and details of the amounts that we have to pay to the European Economic Community, the Bill will not give them a clue. The purpose of my amendment is to insert at the end of the Bill two schedules that are the text of the decision and undertaking respectively. I challenge the Paymaster General to deny what I have said. The amendment will not change one iota the legal impact, significance or outcome of the Bill. All it will do is add to its clarity and to democracy. It will add to what we should have in the House—national glasnost. With the Bill as it stands, we would not have that.

Mr. Teddy Taylor: The hon. Gentleman has obviously done a great deal of work on his amendment. I have studied it and the text carefully. He stated that the text is basically that of the undertaking and decision. However, if the hon. Gentleman looks at his amendment and the Command Paper, he will see that they are not the same. For example, on page 4130 of the Amendment Paper, in lines 6 and 7 of article 11 there are words that do not appear in the Command Paper. There has been either a misprint or a misunderstanding. We cannot continue until that is sorted out. I appreciate that the hon. Gentleman is probably one of the most serious and conscientious hon. Members and studies European Community documents with great care. Few people have given as much time as he has to debates on the Community in the House. However, the amendment does not simply repeat the words in the Command Paper but two lines are added, which I cannot understand, and I believe that many other hon. Members would not. What is it all about?

Mr. Spearing: I regret that I cannot think quickly enough to reply to the hon. Gentleman's good point, but it does not detract from the thrust of the Bill. If it is a technical imprecision, I have no doubt that the Treasury Bench will tell us. I want the Government to accept the principle that the undertaking and the treaty should be written into the Bill.

Mr. Teddy Taylor: On a point of order, Sir Paul. I do not want to be difficult. The last thing that I want to do is undermine the excellent amendment moved by the hon.


Member for Newham, South (Mr. Spearing), but it is not English and not adequate. The two lines to which I referred do not add anything. What is the basis for debating an amendment that contains a sentence that does not have a beginning? What do we do if we have an amendment that does not seem to make sense? I appeal to you, Sir Paul, to look at lines 6 and 7 of article 11 on page 4130. What does it mean? What is the position of the House of Commons when we are debating an amendment that is not English and seems to contain things that do not add up? What are we to do? We cannot debate an amendment that is not English.

Mr. Marlow: rose—

The First Deputy Chairman: Order. We would do well to let the hon. Gentleman continue to explain his amendment

Mr. Marlow: On a point of order, Sir Paul. Am I right in understanding that we are debating amendments Nos. 13, 14, and 15 together? If we are doing that, we are not just debating the hon. Gentleman's hook, because we have two fish on the end of the line as well—schedules 1 and 2 which are the guts of the Bill. If this is what we are debating, surely that would entitle my hon. Friend the Minister to make a wide-ranging speech on the Government's current position about the Bill.

The First Deputy Chairman: Perhaps I could help the Committee by reiterating what the hon. Member for Newham, South (Mr. Spearing) said in moving his amendments, which is that we are also debating amendments Nos. 14 and 15. As the hon. Gentleman made clear, the whole object of the debate, and the only matter that it is in order to speak to, is why these schedules should be in the Bill. That is what the hon. Gentleman is explaining to the Committee.

Mr. Spearing: I am grateful to you, Sir Paul, for your remarks. I should make it clear that if the Minister wishes to expand on the contents of the schedules or on any printing errors drawn to the attention of the Committee by the hon. Member for Southend, East (Mr. Taylor), we might deal with the matter in another place. If the Minister can say that he accepts in principle something along the lines of what I am suggesting in the amendment, we could debate the substance of schedules 1 and 2 in the clause stand part debate. If the Minister wishes to do that, I shall be quite happy to listen to what he has to say.

Mr. William Cash: Does the hon. Gentleman agree that, apart from the enormous amount of verbiage contained in the schedule, for practical purposes the esential question is about the legal effect of the provisions of clause 1? The consequence of doing it in the way provided for by the draftsman effectively means that it has legal effect. Whatever the merits of the issue, does the hon. Gentleman agree that it would be better to add it to the Bill so that it would have legal effect rather than to leave it at large, which would be dangerous? I am sure that the hon. Gentleman would not agree if it were done in that way.

Mr. Spearing: I do not think that it would be the same, because the Command Papers could be referred to in conjunction with the Bill and could be looked up by a

citizen who would be able to see the text. The Bill is not as clear and full as it deserves to be. I hope that Conservative Members will at least agree with that in principle.
We are dealing with huge sums of money and it is right that our citizens should be able to read in an Act of Parliament how those sums are arrived at. I remind the Committee of the amounts. In 1987 we sent to the EC £1,278 million in customs payments. We contributed £3,053 million in VAT. That is not 1·4 per cent. of the VAT take: it is about 13 per cent. because the 1·4 per cent. is not VAT but a VAT base. Under this proposal, we will top that up with a new GNP contribution, allowance for which is contained in the schedules, and that contribution will be up to a given figure. The total will be more than 25 per cent. of what we contribute at the moment. The way in which this is done—I have outlined it in brief terms—should be contained in the Bill. If the schedules go in, the calculations for the vast figures that I have outlined will be there.
We do not only have the calculations that I have mentioned, because there is a new provision for an agricultural balancing fund, a provision for the rebates to the United Kingdom. There is also provision for an overall envelope about what can be spent in every year up to 1992. These are vast sums, and every year there will be a calculation. As the Bill stands, nobody could find out by looking at it how this is done. The schedules should be included in the Bill and be part of the Act.
4.45 pm
It is right that when legislating on such matters the Committee should include such details in a Bill. After all, that is what schedules are for. That is the principle of good draftsmanship. I am talking about the more technical details which, while not germane to the principle, must be included. Without them the principles cannot be understood. That is what legislation in a democracy is all about. Unless these schedules go in, people might say that the Government are deliberately obscuring the way in which this money is spent.
I remind the Committee again that if the Bill becomes an Act, there will be an automatic payment every year until 1992 and there will not necessarily be a debate in the House, other than a debate on the European Budget as a whole. Therefore, the money will go straight from the Consolidated Fund without debate because it will be authorised by the Act. For that reason this detail should be included in the schedules to the Bill.

Mr. Skinner: My hon. Friend says that there may be no further debates about the allocation of money from Britain to the Common Market. Is he saying that we shall not hear from the Prime Minister on those publicised occasions when she is supposed to be arguing for barrowloads of money for Britain from the Common Market? Despite all the publicity, the Prime Minister has been engaged in a bartering exercise which means that not only have we paid over £5 billion to the Common Market since she became Prime Minister, but that in future the Prime Minister will tell the nation another story. She is now presenting to Parliament a Bill that will not even give the House power to say that it is not prepared to hand over, in this instance, £765 million. Is that what my hon. Friend is saying?

The First Deputy Chairman: Order. I am sure that the hon. Gentleman will resist the temptation to broaden the debate.

Mr. Spearing: I shall attempt to resist that temptation, but I should like to correct my hon. Friend who asked some pertinent questions. As I understand it, it is not a matter of £765 million for the current EEC budget which, we believe, might not even need the money. The Bill authorises much larger sums of between £3,000 and £5,000 million a year for the next five years. The Minister will correct me if I have given the wrong range of figures. Those sums are to be transferred from the Consolidated Fund and will go directly to Brussels without coming through the House, without a motion—and, indeed, without a speech from the Prime Minister. That is what the Bill is about and that is why the Bill is such an important and fundamental financial measure.
Irrespective of the merits of the undertaking and the decision, which we will come to after the next debate, it is essential that the text of the decision and the undertaking be contained in the Bill. Unless that happens, the British people and onlookers from the Soviet Union might say that the Government are deliberately avoiding public accountability by not telling the people what they are doing but covering up by using jargon found in remote Command Papers that may not easily be available when people want to look them up. They should be included in the bound Acts of Parliament which I point out to school parties when I take them through the Lobbies and say, "There is the law of the country." The Bill should include these details; if it does not the Government are reneging on their democratic accountability and responsibility.

Mr. Teddy Taylor: I have three short questions to put to the Minister about this narrow amendment. First, can we put right what appears to be a misprint? We appreciate Oat there was a great rush, because the debate was announced on Thursday and is being held today. What is the procedure about misprints, and can they be dealt with under article 11? Secondly, will there be a difference in the legal position of these undertakings if they are included in the document, as proposed by the hon. Member for Newham, South (Mr. Spearing)?
Some of us have become rather mystified about the extent to which EEC documents, undertakings and decisions have no legal backing whatever. My hon. Friend the Minister will be aware, for example, that as a result of one of these documents, we are paying the Community £765 million to cover an overspend in 1987. He will also be aware that we had the most detailed assurances from my right hon. Friend the Prime Minister in 1985 that such overspending could not take place because of strict budgetary controls, which were binding on the Council. I hope that in dealing with this narrow amendment, my hon. Friend the Minister will say whether it makes a difference in law, and whether any obligations on, or assurances and undertakings by, the EEC count in law.
Thirdly, if the Bill becomes law, will it prevent the Common Market from using the accountancy fiddles that it has used—sadly, with the co-operation of Ministers—time after time at the expense of the taxpayers and people of Britain, to get away from its undertakings? The hon. Member for Bolsover (Mr. Skinner) and others talk in the House with great authority about the problems facing their constituents and the need for more money for this, that and the other purpose, but the EEC shows no concern about the way in which money is spent.
For example, if this Bill is agreed and becomes the law of the land, will the Community be able to get round the

controls again by changing round the financial year to make it a 10-month instead of a 12-month year? My hon. Friend the Minister will be aware that the EEC did not break the budget in 1987, but simply changed the year to one of 10 months by having money paid in a month in advance and paying money out a month late. Would it be possible for this to happen once again, even if we make this Bill law? If it is, what we are doing would be complete nonsense.
Is there not a need to put something more directly related to the EEC obligations into the law? In particular, will my hon. Friend bear in mind the contributions for the current year and the series of statements that the Government have made month after month changing the figures? They started off at £500 million, were changed to £800 million and then to £1,200 million, and now become £1,649 million. If any Labour council in Britain carried on in that way, it would he vigorously attacked by the Government.

Mr. Skinner: That was the point that I wanted to make. Local councils such as Lambeth and Liverpool have been, and other councils will be, threatened with surcharges, as a result of overspending on vital services in the community. Have the hon. Gentleman and his hon. Friends ever considered the idea of having a Star Chamber to control Common Market money? As we all know, various Ministries are battling to get allocations of funds, and the Secretary of State for Energy is now, as chairman of the Star Chamber, in charge of allocating such money in the event of an impasse. It seems strange—I hope the hon. Gentleman will comment on this—that such are the restrictions imposed by the Star Chamber on spending money on vital necessities that family allowance is frozen, and many other services are cut, but in the Common Market there was £2 billion-worth of fraud last year, but nobody has been picked up for it.

The First Deputy Chairman: Order. These wider remarks are much more relevant to the clause stand part debate, which will be the next one. This debate is a comparatively narrow one, on whether the schedules should be in the Bill.

Mr. Taylor: rose—

Mr. Marlow: I am grateful to my hon. Friend. The third point, which I am just trying to get clear in my mind, as I am sure that my hon. Friend the Minister is trying to get it clear in his mind, is the point that my hon. Friend is making. Is he saying that if the schedules were included, any British citizen would then be able to take a case before a British court if the rules laid down by the schedule were not obeyed by the European Commissioner and the institutions of the European Community? Is that the question he is asking? If it is, it is an important question, and I am sure that we shall get a clear and precise answer from my hon. Friend.

Mr. Budgen: I wonder whether my hon. Friend—

The First Deputy Chairman: Order. We cannot have an intervention in an intervention.

Mr. Taylor: My hon. Friend the Member for Northampton, North (Mr. Marlow) has asked what I should like to ask the Minister. We have a sensible amendment, tabled by a sensible Member. Whether or not we accept the amendment, the whole thing is a sick fraud.

Mr. Budgen: Is my hon. Friend aware how deeply offensive his remarks are to loyal members of the Conservative party? All of us know that, after the Fontainebleau agreement, all the finances of the EEC were reformed for all time. There can be no overspending after that agreement. We were told that finances were reformed and that there would be no more overspending. It is monstrous that my hon. Friend suggests that there is overspending. It is monstrous that anyone should suggest that there is any more need for any more money. We were told on the highest authority that all is well and, while I recognise my hon. Friend's right to criticise, many people will he deeply affronted by his disloyalty in suggesting that all is not well.

The First Deputy Chairman: Order. Let us get back to the amendment.

Mr. Taylor: What my hon. Friend said is relevant to the amendment. However, does the Minister think that the Bill has any importance or any significance? For example, if we made this part of our law, would it have the slightest effect on the Common Market changing the responsibility for expenditure from the EEC to member states? My right hon. Friend the Minister will be aware of an example, and he may wish to comment on it. When the Common Market was bust last year, it decided that it should transfer responsibility for paying for butter dumping from the EEC to member states. That was an interesting proposal because it meant that the Common Market would spend less while member states would spend more, and it would find a way to get round the budget.
The Court of Auditors is meant to represent us, to stop overspending and to try to stop fraud, although it cannot. However, the court said that this practice was unlawful, and it placed before the Council of Ministers a report saying so. My hon. Friend the Minister may recall what happened to that. He may recall that, instead of action being taken and instead of the Council considering how this was unlawful, it decided not to discuss the matter, so that unlawful payment, if it was unlawful, is still being made by the United Kingdom taxpayer.
We know that the Common Market is changing its plan to increase its revenues greatly by using what it calls anti-dumping levies. My hon. Friend the Member for Amber Valley (Mr. Oppenheim) raised this issue only the other night. The Minister will be aware that, as part of a programme of trying to restrict trade, the Common Market is putting huge levies, of up to 30 per cent. or more, on any product coming from the far east, which is putting many firms in Britain at risk. This move greatly increases revenue, but will it have the slightest effect on improving the position of the British taxpayer?
While we appreciate that there are lots of words in the decisions and the undertakings, and while we appreciate that some words may be changed if the Bill is put into law, could the Minister give us any assurance that the British taxpayer and the British Parliament are affected? We have heard many stories of fraud. We have heard about the Mafia firm which, according to the Court of Auditors, is paid 17 million lira to deliver non-existent fruit juice to NATO headquarters in Palermo. What is happening about that? The answer is, nothing.
Are we not going through a bit of nonsense? Has my right hon. Friend the Minister the slightest assurance that this will make any difference to Common Market control?

As my hon. Friend the Member for Northampton, North has inquired, could a British citizen do anything about it if there were an overspend? I know that the Minister is a serious-minded person, because he would not be appointed chairman of the Conservative party were he not. Will he tell us what protection, if any, is given to the British taxpayer and the British Parliament in consequence of this decision and undertaking, and whether it has been put into law, as has been suggested?
Will the Bill prevent changing round financial years? Will it stop advanced payments or late payments? Will it ensure that budgets have to be kept or that, for example, we stop some of the fiddles on spending that happen year after year? Why are the sums from the Common Market always so hopelessly wrong? Why has our contribution soared from a relatively small sum to this massive £1,649 million? We are entitled to at least that answer from my hon. Friend the Minister tonight. Will this make any difference, does it affect the law in any way, and does it affect British institutions?

5 pm

Mr. Leighton: The Paymaster General will be aware, from what he has heard so far, that he must make a significant statement when he responds to the debate. He must answer the points raised in the points of order and those made in the previous speech. We want to know what guarantees and assurances there are.
The Paymaster General must realise that we are approaching the matter in the light of the Fontainebleau agreement. We have a sense of déjà vu. We were given copper-bottomed guarantees and assurances at the time of the Fontainebleau agreement. He will know that it was agreed at the Fontainebleau summit to increase the VAT take by 40 per cent. That was done on the solemn guarantee that there would be financial discipline. Some of us said at the time that, if we had financial discipline, it would not be necessary to have an increase of 40 per cent., and that it would be far better to approach the problem the other way around and say that we would not keep paying the cheques. Nevertheless, it was done the other way and VAT was increased by 40 per cent. on the promise of financial discipline.
However, that was all nonsense. The measure failed, and we want to know why ministerial promises now will be any better than they were then. The Government have come back to us today with an intergovernmental agreement of about £750 million to pay for the previous mistakes. Under the Bill, they propose to increase the Community budget by 25 per cent. If any of the Paymaster General's colleagues among the spending Ministers who are now negotiating with the Treasury said to the Financial Secretary, "A little while ago I asked for and obtained an increase of 40 per cent. I now want another increase of 25 per cent.," we all know what sort of an answer they would receive from the Treasury.
That money would be for domestic spending on our constituents. That is where the Treasury keeps a tight grip on the purse strings. That is what might be called monetarism or the policy of the Conservative party regarding what the Government spend in this country. However, when it comes to expenditure on the Common Market—

The First Deputy Chairman: Order. I am finding it difficult to relate the hon. Gentleman's remarks to the


amendment. His comments would fall more appropriately in the clause stand part debate. I am sure that he will relate his comments to the amendment.

Mr. Leighton: I am asking how the Bill and the amendment will give the House guarantees and assurances on which we can rely and which are better and more copper-bottomed than those given at the time of the Fontainebleau agreement. The Paymaster General must understand that we are suspicious and not convinced by the honeyed words of Ministers on the Treasury Bench, having heard those words before. Every time the Government come to us on Common Market matters, it is for more money. The Common Market is putting its hand in our pocket for more money all the time.
Sir Paul, you know that many other countries in the Common Market do not pay anything at all. They are net beneficiaries. They are richer than we are. Their GDP per capita is greater than ours, yet they take money out of the Common Market. This country puts money in and, every time we discuss the matter, it means more money for the Common Market. We are told that there will be assurances and guarantees, but I do not believe those that we are given. The next time the Common Market comes hack to us, it will he for even more money. That is the track record.
The Paymaster General has, therefore, a heavy responsibility and we shall commit his words to memory. The words that he utters now will be held against him if he gets it wrong in a year or two years' time. I say that in the most friendly spirit, as he will realise. He has a heavy responsibility to respond to the points that have been raised.

Mr. Cash: I hope that my right hon. Friend the Paymaster General will he good enough to deal with one point that I wish to put to him. I supported the Bill on Second Reading and agree with its main objects. The British people have the opportunity to consider, through a Committee of the whole House, the construction of the measure, which gives legal effect to a Community treaty.
My hon. Friend the Member for Northampton, North (Mr. Marlow) asked whether the provision would be justiciable before the courts. If the decision had not been given legal effect under the provisions of the Bill, surely there would be no basis upon which the matter could be referred to the courts. It is said, quite rightly, that the decision is directly applicable in the jargon of the European Community and, as I understand it, decisions directly applicable in Community law are also capable of being taken to the courts by individuals, where they can establish a satisfactory suit.
In that case—this seems to be the main object of the Bill—could member states ensure that the financial discipline intended by the provisions of the decision would be sustained, not only in the interinstitutional agreements between member states, but with the additional advantage that, in extremis, the matter could be referred to the Court of Justice? In that case, so far as is conceivably possible and given that there has not been a tremendous record of keeping within the limits previously indicated in other similar exercises, on this occasion the Government and the member states have got it right by requiring that the financial stringency contained in this decision will be adhered to and, in the final analysis, will be capable of being taken to the Court of Justice.

Mr. Stuart Holland: We certainly understand why the Government have some problems in this matter, many of which have been eloquently put by Conservative Members. There is a contrast between the provisions in the Single European Act and the speech made by the Prime Minister at Bruges. There is also a problem because, not unlike the holy Roman empire, the Single European Act is neither single, nor European, nor an Act. We do not have before us in this House at present a single statement in a recognisable form which the House can amend, approve or disapprove, and which is readily assimilable either by those outside the House or by many inside the House.
In terms of the Act, the Government are very much at sea and it will be interesting to see how the Paymaster General responds to the amendments tabled by my hon. Friend the Member for Newham, South (Mr. Spearing). We certainly support his amendments. They do not in themselves—as you have told the Committee, Sir Paul—raise the occasion for a discussion in Committee of the substantive issues referred to in the schedules concerned. However, their publication is important because it is dificult to follow the argument unless we can see it fully stated.
There is cross-reference in new sub-paragraphs (e) and (f), although we have the Council decision of 7 May, the intergovernmental agreement of April 1985 and the decisions of 24 June 1988. It may be clear to the body concerned what is involved and it may be to some of us, because we have to address these issues. With the co-operation of the Library, we have been able to gain the detailed text. Of course, we may follow these issues for other reasons. However, in our view there should be publication. My hon. Friend the Member for Newham, South has good reason for tabling the amendments and we support them. We shall be astonished if the Paymaster General does anything other than support them on behalf of the Government.

The Paymaster General (Mr. Peter Brooke): We have had the pleasure of the summer recess since we deliberated on these matters on Second Reading. I would be the first to acknowledge, however, that events occurred duringn the recess, as they always do. Before we embarked upon an interesting debate on the amendments, several hon. Members raised expectations in their points of order that I was about to make a novel statement on behalf of the Government as to their intentions in the context of the Bill. I do not want to arouse great expectations in terms of what I might say subsequently. Modest though my contribution will subsequently be, I can heighten the suspense a little by deferring it until we come to consider whether the clause should stand part of the Bill.
The hon. Member for Newham, South (Mr. Spearing) explained the amendment with the cogency that we have come to expect from him. I accept the need to keep hon. Members fully informed about all Community legislation, and I hope that the Government have a good record in that regard. Despite the expectation of the hon. Member for Vauxhall (Mr. Holland), I believe that it would be unnecessary to add the new own resources decision and the 1988 intergovernmental agreement as schedules to the Bill.
Both those documents have already been made available to hon. Members and the public at large in the form of Command Papers, as the hon. Member for Newham, South was good enough to say. The new own


resources decision was published as Cm. 419 and the 1988 IGA as Cm. 418. Both Commands were issued in July. Copies of the documents were made available in the Vote Office on Second Reading and hon. Members had the opportunity of reading them before voting upon them. The documents were referred to in the business statement of the previous Thursday as being relevant to Second Reading.
We did not attach the 1985 own resources decision or the 1985 IGA as schedules to the European Communities (Finance) Act 1985, for reasons similar to those which I have adduced. I recall that the hon. Member for Newham, South participated in the debates on that measure. The Bill follows the precedent that was set in 1985. I would not want to depart from those arrangements unless there was good reason for doing so. The European Communities Act 1972 did not set out as schedules all the relevant treaties.
My right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) was with us briefly at the Bar of the House earlier in the debate. He did not enter the Chamber to participate in it. He would have been able to confirm the position which I have described in earlier legislation.

Mr. Skinner: The Minister has referred to the right hon. Member for Old Bexley and Sidcup (Mr. Heath). Is that the same right hon. Member who went to the rostrum at the Tory party conference a few weeks ago to be rubbished by others who were supporting the Prime Minister? Is he the same hon. Member who still embraces the type of legislation to which the Minister has referred? I would like to know what sort of Alice-in-Wonderland world he lives in. A fortnight ago, Conservatives were rubbishing the right hon. Member for Old Bexley and Sidcup because he had the guts to tell the Prime Minister that she is one of the authors of the Single European Act, and the right hon. Lady is one of the authors of the Bill.
The Minister is now saying in nice tones that my hon. Friend the Member for Vauxhall (Mr. Holland) would welcome this position. Of course he would. The truth is that the Prime Minister has changed her view to a massive extent, at least on the surface. I want to know how much hypocrisy there is in the series of prime ministerial statements that have been made. The right hon. Lady is telling the world that she has had a change of heart on the Common Market, yet she sends Ministers to the Treasury Bench to say the opposite. She does not have the guts to say that herself. Is the Minister on the Prime Minister's side or that of the right hon. Member for Old Bexley and Sidcup? I want to know.

Mr. Budgen: Would my right hon. Friend allow me—

The First Deputy Chairman: Order. We cannot have an intervention within an intervention.

Mr. Brooke: I shall give way shortly to my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen).
The hon. Member for Bolsover (Mr. Skinner) asked whether my right hon. Friend the Member for Old Bexley and Sidcup is the same individual as he who made a certain contribution to a debate at the Conservative party conference. If it is not the same gentleman, someone was

exceptionally well disguised. It was an admirable contribution to the debate, but that is not the subject of the amendment.

Mr. Budgen: I am sure that my right hon. Friend, who is a generous-minded person, will apologise to my right hon. Friend the Member for Old Bexley and Sidcup (Mr. Heath) for the way in which he was rubbished at the Tory Party conference. He was supporting exactly this sort of legislation. He was demonstrating his loyalty to the European ideal. It is only we who, sadly, in a perverted way, wish to support the Bruges speech, who are out of step. I am sure that my right hon. Friend will wish to apologise to my right hon. Friend the Member for Old Bexley and Sidcup for the disgraceful way in which he was treated in the recent past.

Mr. Brooke: My hon. Friend has always had a good turn of phrase. As soon as I read the speech that my right hon. Friend the Prime Minister delivered in Bruges, I knew that it was a subject to which my hon. Friend would wish to return on many occasions. He has already done so to my consciousness on several occasions, and I have every confidence that he will do so again on many occasions in future. The speech warrants the amount of critical attention that he gives it.
It may be that the hon. Member for Newham, South tabled the amendment to ensure that the new own resources decision and the 1988 intergovernmental agreement were printed on the Order Paper for the convenience of hon. Members in Committee. In that respect, we are all in his debt. I shall deal in a moment with the misprints to which my hon. Friend the Member for Southend, East (Mr. Taylor) referred.
The hon. Member for Newham, South asked some specific questions about payments under the IGA. The Commission requested that the first IGA payment for eight twelfths of the total due, or around £500 million, be made on 1 August. Further requests have been made at the beginning of each month since then. The Commission has asked member states that are not in a position to pay their IGA contributions to make available overdraft facilities under article 12(2) of regulation 2891/77. The United Kingdom has not yet made any IGA payments and has therefore granted the Commission overdraft facilities.
The hon. Member for Newham, South asked me about transfers from the Consolidated Fund of £3 billion to £5 billion per annum during 1988–92. That is the gross contribution after abatement, and the figures are expected to lie within that range. The hon. Gentleman was talking about amounts transferred to Brussels, and that is the net contribution. These will be below the £3 billion to £5 billion range which he quoted. A projection will be included in the autumn statement.

Mr. Teddy Taylor: Will my right hon. Friend say more about the overdraft facilities? He has said that the Government have paid the money—we are debating whether they should pay it—in the form of an overdraft. Under what legislation are the Government entitled to give loans to organisations such as the EEC, and how far can this facility be made available? What provision is there for repayment?

Mr. Brooke: My hon. Friend the Member for Southend, East, who follows these matters very closely, knows that we treat on these matters frequently. I treat on


them in answer to questions that he puts to me, so they are a familiar instrument within the Community's arrangements and of course they are legal. An overdraft cannot be granted unless it is within the budgetary amounts of the year in question, and of course, under those rules, we have responded.

Mr. Teddy Taylor: My right hon. Friend must accept that we are debating as a Parliament to safeguard the people's money. The Paymaster General just said that he has handed over £765 million to the Common Market as an overdraft because of some apparent relationship with the budget, which he must know is an overspend which we were told would not happen. Under what powers of what law did the Minister give an overdraft facility of £765 million to the Common Market? That is a simple question, and surely it is our job in the House of Commons to raise it.

Mr. Brooke: A moment ago I said, under article 12(2) of regulation 2891/77. I repeat that—article 12(2) of regulation 2891/77. That is an issue to which we have frequently referred, both in evidence before the Select Committee on the Treasury and Civil Service and in debates in this House.

Mr. Skinner: Will the Minister confirm that that is federal money?

Mr. Teddy Taylor: rose—

Mr. Brooke: I must clearly develop some instinct for which interventions not to give way to.

Mr. Cash: rose—

Mr. Budgen: My right hon. Friend was good enough to say that an overdraft to a certain level is lawful. If for the sake of argument the overdraft was 10 times as large, would that also be lawful? Are we to understand that the Community as authorised by this Parliament has the right to incur an unlimited overdraft?

Mr. Brooke: It may be helpful if I refer to a remark that I made in the debate of 19 May. I said:
Member states are obliged to comply with overdraft requests by the Commission and article 12(2) of the regulation, provided that these are genuinely needed to cover a prospective cash deficit, and provided that they would not involve exceeding the own resources known to be available for the year. The Government stand ready, therefore, to meet such overdraft requests, before or after adoption of the budget, and before or after final agreement on the IGA, provided that these conditions are fulfilled. We would charge such overdrafts directly against the Consolidated Fund, like all other Community obligations, while keeping the House fully informed."—[Official Report, 19 May 1988; Vol. 133, c.1151.]

Mr. Cash: Does my right hon. Friend agree that if it is indeed a regulation, as appears to be the case, under sections 2 and 3 of the European Communities Act 1972, all Community obligations, including in particular regulations, are effective in law? Therefore, if this particular overdraft facility was made available under that regulation, it is already authorised under the Act to which I have referred as a Community obligation.

Mr. Brooke: I am grateful to my hon. Friend for reinforcing the point that I made earlier.

Mr. Leighton: I am sorry to interrupt the Paymaster General again, but I am certain that he realises that this is

an important point and in the interests of clarity we should clear it up. Normally, when one gets an overdraft, it has a limit. I believe the right hon. Gentleman explained that there is a limit. However, will he put a cash figure for the current year on that? What is the overdraft's limit?

Mr. Brooke: If I may, I will deal with the questions as we proceed.

Mr. Teddy Taylor: rose—

Mr. Brooke: I want to make a little progress and then I will be content to give way. I hope that I can tell my confrère, the chairman of the Labour party, that—[Interruption.] The overdraft does not take the place of the IGA. The total amount of the overdraft is restricted to the total own resources under existing arrangements, as my hon. Friend the Member for Stafford (Mr. Cash) said. Accordingly, we have paid in line with the European Communities Act 1972.

Mr. Skinner: Now what about the ozone layer?

Mr. Brooke: Although there would be circumstances under which I would be grateful for the diversion of the ozone layer, I think that we can continue to make progress on this business.

Mr. Marlow: I have two brief points on which I would be grateful for my right hon. Friend's clarification. First, my hon. Friend said that this is being done in accordance with the regulation. Could my right hon. Friend tell the House when the House debated that regulation and gave its assent to it? Could he also tell the House which Act of Parliament enables the House to make payment? My right hon. Friend also said that an overdraft facility was allowable up to and including the own resources ceiling and also within the budget. Is it not the case that in this case the Community exceeds own resources and that is why the overdraft is being paid?

Mr. Brooke: Would my hon. Friend the Member for Northampton, North (Mr. Marlow) please repeat the first part of his question?

Mr. Marlow: When did the House debate the regulation under which this overdraft facility is being granted, and did it give its assent?

Mr. Brooke: I have held this office for nearly three years, but our history of dealing with these matters goes back before that. So close and so vigilant is the attention that my hon. Friends the Members for Northampton, North and for Southend, East pay to these matters that if we had not been behaving regularly, they would have pointed that out a long time ago.

Mr. Teddy Taylor: The Minister said first of all that he was unable to say under which British law we pay this, but he says that he is obliged by a Community article to make payments to the level of own resources. Surely he accepts that new sub-paragraph (f) does not relate to own resources, but to the fact that the Community has overspent resources in 1987–88. Under what year's own resources is he making the payment? If he is correct in so doing, observing that this does not lead to a payment within existing own resources, is it right in respect of an overspend of own resources?

Mr. Brooke: The payments that we have made, which we have regularly and faithfully reported to the House,


have been conducted in line with our legal obligations. The Commission asked for overdrafts under article 12(2) of regulation 2891/77 in each month since June. The Commission's overdraft with the United Kingdom currently stands at £17·4 million, having peaked at around £166 million in mid-August. I hesitate to say that, against the kind of figures that were quoted a moment ago.

Mr. Cash: Does my right hon. Friend agree that, on 1 June 1988, the President of the European Parliament signed the budget for this year after there had been a serious dispute? Once he had done so, part of the mechanism required to ensure that it was fully lawful was complied with. In other words, 1 June is important and after that date payments made in accordance with the procedures that have been described are lawful.

Mr. Brooke: I am most grateful to my hon. Friend for that confirmation.

Mr. Skinner: rose—

Mr. Brooke: I have been asked a series of questions by my right hon. and hon. Friends that I must answer first.
In particular, I was asked whether the overdraft payments that have been made are in effect IGA contributions. The Commission is well aware that payments under the IGA cannot be made until member states have completed their national procedures for approving them, and that that takes time. Meanwhile, as I have said, we have a legal obligation to meet article 12(2) overdraft requests, provided that they are properly drawn up. The sums requested by the Commission as own resources, excluding the IGA, under the new budget are less than the sum that would have been required under provisional twelfths. Looking at the budget as a whole, the Government took the view that it was right to meet the payment requests made by the Commission; not to have done so would have risked court action and the possibility of substantial interest payments.
I turn to the series of questions asked of me by my hon. Friend the Member for Southend, East. First, he asked whether misprints in the schedules could be put right. Clearly, were the schedules to pass into the legislation, as proposed in the amendment of the hon. Member for Newham, South (Mr. Spearing), they would need to pass correctly. My hon. Friend is correct in saying that there are misprints, and they would need to be corrected. However, as I said in my initial response, the Government's view is that the new schedules should not be added to the Bill, so the question of correcting the misprints does not arise.
My hon. Friend further asked what legal effect the inclusion of the schedules would have. If they were properly drafted—I am sure he would take that as common ground between us—their inclusion should have no special legal implications. He asked also what would be the effect of including the schedules on what he described as budgetary fiddles, such as the metric year. The Brussels package included changes to budget management that will help to limit artificial devices—such as, for example, limiting legative reserves and reinforcing annuality. However, that would not prevent recourse to another metric year.
While it is true that the Community was only able to respect the old financial guideline for agriculture in 1987 by changing from a system of advance payments to reimbursements, and that that effectively produced a one-off saving of two months' expenditure in 1987, the British Government supported that move not only because of the budgetary constraints at the time, to which my hon. Friend himself alluded, but also—I emphasise this point —because it makes better sense from the point of financial control for agricultural expenditure to be reimbursed like all other Community expenditure.

Mr. Terence Higgins: My right hon. Friend mentioned that incorporating the schedule in the Bill would not make any difference to legal enforceability. However, we have been assured throughout our debates, on many occasions, that budgetary discipline will now be legally enforceable. Will my right hon. Friend tell the House where in the Bill that legal enforceability is reflected?

Mr. Brooke: Given the fact that the Bill refers by their titles to the items that the hon. Member for Newham, South wishes to include in terms of schedules, the Government have continuously made it clear, throughout the earlier debate that led to the Brussels council's conclusions and in all our subsequent debates, that it was not possible at the Brussels Council itself to put into legal form the particular instruments needed to achieve the objective to which my right hon. Friend refers. However, as he knows, we made it clear that the principle was being established in terms of the Brussels Council.
As he also knows, the new own resources decision was not accepted within the Council for presentation to national Parliaments until 24 June. In the intervening period, between February and June, it was possible for draftsmen to work out the necessary instruments to achieve—for instance, in the context of automatic agricultural stabilisers—the purposes that I know my right hon. Friend the Member for Worthing (Mr. Higgins) shares.

Mr. Higgins: Perhaps I may press my right hon. Friend on what I am sure we both agree is a most important point. When we discussed this matter on Second Reading, the House was told that there were problems in making the non-obligatory expenditure provisions legally enforceable. That is a point to which we might return when we debate clause stand part. However, we were told that the provisions for limiting obligatory expenditure would be legally enforceable. I must again ask my right hon. Friend where it is that those provisions are to be found which would enable those who wish to ensure that expenditure is legally enforced to do so.

Mr. Brooke: My right hon. Friend is familiar with the process by which, as I said a moment ago, there are specific instruments intended to give such provisions legal form. I agree with my right hon. Friend that we are here talking about compulsory expenditure and not DNO, to which we can return, where those instruments have passed through the Council in the form of an extension of the basic principle.

Mr. Budgen: Before the Prime Minister went to the Fontainebleau summit, she said that she wished to achieve legally binding constraints on EEC expenditure. When she returned, she said, "Very sorry—we are not able to get


legally binding constraints on EEC expenditure. That is not technically possible." She now says, "Never mind what happened at Fontainebleau—we have now agreed to have legally binding constraints." What changes have there been in the EEC constitution that now make it possible for legally binding constraints to be introduced?

Mr. Brooke: My hon. Friend knows very well that, in terms of the negotiations into which the British Government entered with their colleagues in the Community that led first to the Copenhagen European Council and then to Brussels, we were making it a sine qua non of our commitment to the agreement that was reached that it would be possible to achieve such legally binding instruments.

Mr. Budgen: Can my right hon. Friend tell the House why that could not have been done at Fontainebleau?

Mr. Brooke: I am not in any way seeking to escape a full and direct answer to that question by saying that I myself was not involved at that stage, but my hon. Friend knows that it was the very fact that we were unable to secure those legally binding instruments at Fontainebleau that made us determined, in the run-up to Copenhagen and Brussels, that we would not reach agreement with our Common Market partners unless such legally binding instruments were secured.

Several Hon. Members: rose—

The Second Deputy Chairman of Ways and Means (Miss Betty Boothroyd): Order. To whom does the Paymaster General wish to give way?

Mr. Brooke: I believe that I should give way to my hon. Friend the Member for Skipton and Ripon (Mr. Curry), who has not previously intervened.

Mr. David Curry: Is it not a fact that, following the Brussels summit, a series of statements of intent incorporated in that declaration were then translated into specific changes to the agricultural regulations, that they passed in the usual way and were approved by the Council of Ministers and the European Parliament, and that they now form Community law? Is it not true that, after Fontainebleau, the reforms were limited to a statement of good intentions not translated into regulations? Is it not the case that those reforms, which were known by the codeword "stabilisers", are now incorporated in the regulations and have been applied—notably in the case of oilseed rape, cereals and wine?

Mr. Brooke: I am grateful to my hon. Friend for putting much more eloquently than I did my answer to my hon. Friend the Member for Wolverhampton, South-West, who I see has changed his position in the Chamber.

Several Hon. Members: rose—

Mr. Brooke: I should be delighted to give way in a moment, but my right hon. Friend the Member for Worthing was seeking a more specific response from me.
Essentially, I think that he was asking about the legal text to enforce budget discipline. It is contained in various measures of Community law, in particular the budget discipline decision. That decision does not require approval by national Parliaments as does the own resources decision, but it is Community law, and the own

resources sub-ceilings in the own resources decision reinforce budget discipline over total expenditure. I shall return to the inter-institutional agreement in a moment.

Mr. Richard Shepherd: Will my right hon. Friend explain why, if the Government are yet again confident about budget discipline—forgetting Fontainebleau and so forth—we cannot incorporate it into British law and thus reaffirm our commitment in the Bill?

Mr. Brooke: I hope that I may give my hon. Friend a longish answer. As I am sure my right hon. and hon. Friends would agree, securing those legally binding instruments was a substantial achievement and to the future good of the Community, but to change the whole structure of Community legislation in relation to this Parliament as well might have been unduly ambitious.

Mr. Cash: Does not the Bill's long title refer to both the decision of 24 June 1988 and the undertaking—namely, the intergovernmental agreement—that the decision should be automatically binding under the European Communities Act 1972, because it is a decision of the Council of Ministers? The undertaking would not necessarily acquire the same legal status, so the Bill effectively combines the two, thus giving full legal effect to the combined provisions or both documents and putting beyond all doubt that the provisions in the Bill are fully effective legally.

Several Hon. Members: rose—

The Second Deputy Chairman: Order. The Minister must have the opportunity to reply to one intervention at a time.

Mr. Brooke: I think that we are drifting some distance from the amendment, but I am grateful to my hon. Friend the Member for Stafford for what he has said.

Mr. Hugh Dykes: Is not my right hon. Friend being too apologetic? Was he not right to say what he did just before that last intervention—that the agreement is very satisfactory and is properly legally enshrined in the Bill? Of course, the status and construction of Community law is the same as that of British law. There is no distinction, if we are fully fledged members of the Community. Why does my right hon. Friend not say that, without being so apologetic?

Mr. Brooke: I hasten to say that I was not trying to be apologetic. I have been trying to satisfy the understandable curiosity of a number of my hon. Friends, which I expect to continue for some time to come.

Mr. Marlow: Will my right hon. Friend give way?

Mr. Brooke: I think that if I do not answer the fourth question asked by our mutual hon. Friend the Member for Southend, East, we may all forget that he asked it.
My hon. Friend asked about the projections of our net payments to the Community institutions. My right hon. Friend the Prime Minister told the House on 15 February that the Brussels package would increase our net payments by a maximum of about £300 million a year compared with what might happen with the continuation of the 1·4 per cent. VAT ceiling, and by about £150 million to £200 million a year in comparison with the underlying level of spending in 1988.
That remains our estimate of what the package will cost. A revised forecast of our net payments to Community institutions, taking account of both the Brussels package and all other developments since the public expenditure White Paper was published, will be contained in this year's Autumn Statement, and the House will have to wait for that to find out what the projection will be.
5.45 pm
A forecast of our net contribution to the Community budget in 1988 will be published in the statement on the 1988 Community budget to be published shortly after the Autumn Statement. The delay in the publication of this White Paper arises partly because of the delay in adopting the 1988 budget itself—the budget as amended was adopted on 7 July—and partly because the Community has not yet published all the 1988 budget documents.
It is true—I am now responding to my hon. Friend's point—that over the past two or three years the Government have tended to under-forecast our net payments to Comunity institutions. That is partly because we did not wish to use any assumptions in the forecast, such as an increase in the 1·4 per cent. VAT ceiling, which could have prejudiced our negotiating position in Brussels on future financing. It is also because of the consistent under-estimation in recent years of United Kingdom VAT receipts, which are used for determining our VAT base for Community purposes. Another important factor is that we have not forecast with complete accuracy the speed of the decline in our share of Community receipts since about 1984.
The hon. Member for Newham, North-East (Mr. Leighton) warned me that the words that I used today might be taken down and used in evidence against me. As I said earlier, I have now survived this office for approaching three years, and a fair number of quotations from my earlier speeches could therefore be deployed; but I am grateful for his advice, and I shall watch what I say.
The hon. Member for Vauxhall pressed us to accept the amendment. I said that by putting down the amendment the hon. Member for Newham, South had provided the whole Committee with the convenience of having the ORD and the 1988 IGA printed on the amendment paper. I hope, however, that having secured that, and given that historically we have not included such schedules to the legislation, he will not wish to press the amendment to a vote.

Mr. Cryer: I am amazed at the Minister saying that the schedules should not be included because they have not been included before. Is he aware that there is a strong current of dissatisfaction in the country with our membership of the EEC? Part of that current is due to the massive number of regulations and Community instruments which pour out, and which make many of our citizens suspect that the sovereignty of this Parliament is being gradually eroded and shifted to the EEC.
I suspect that a few Euro-fanatic advisers in the Minister's Department have said, "It seems straightforward to accept the amendments." It would not do any harm, because, as the Minister said, the inclusion of the

schedules has no special legal implication. What it does is give a pointer to the ordinary citizen who gets hold of a copy of the Bill when it becomes an Act.
Not a huge proportion of our citizens get hold of Acts of Parliament. I suppose that 99 per cent. of the population have never cast their eyes over an Act of Parliament. Therefore, the notion that we are conferring a huge benefit is not true either. Why should concerned citizens have to go to HMSO and pay an extortionate amount for a copy of the Act? The cost of legislation that binds citizens has shot up to an extortionate level under the Government.
Having obtained the Act of Parliament, the citizen has a chat to someone else who might know about such matters, and he is told that there are two EEC documents about agreements that have been reached and those should also be read. The citizen must then find a source for those EEC documents. I am among a tiny privileged minority in Sheffield who knows that there is a regional information centre at Sheffield polytechnic. I do not suppose that there are more than a couple of hundred people throughout the length and breadth of west and south Yorkshire who know that. However, the earnest citizen is now being told by the Minister that he cannot have these extra pages printed in the Bill because it has not been done before. Although the Minister has said that providing the citizen with extra information has no legal consequences, it cannot be done.
It is mean-spirited of the Government to refuse the amendments of my hon. Friend the Member for Newham, South (Mr. Spearing), who has tabled them in a helpful spirit. If the Minister had accepted the amendments and then sat down, he would have probably avoided one of the most gruelling half hours at the Dispatch Box. It would have been a double advantage to him. He could have sat down and still had a bit of a reputation left, but now it has gone. He was not able to answer the questions and was helped out by the hon. Member for Skipton and Ripon (Mr. Curry), who is a Euro-fanatic and knows his way around the financial institutions of the EEC. However, that is not saying much. Not many people know their way around the EEC because it is so labyrinthine.
As people do not understand the EEC, I believe that it is the duty of the House to explain legislation as clearly as possible. Of course, from the point of view of the Minister's Euro-fanatical advisers, there is a difficulty, because the vast proportion of the population suspect that there has been a large increase in the amount paid by the United Kingdom to the Common Market and, if the agreements are incorporated in the Act, that information might filter through to too many of the population. If there is an Act which is pretty meaningless by itself, and those obscure EEC agreements are kept in isolation, fewer people will know.
Therefore, the Prime Minister can go around the country trying to capture the spirit of widespread dissidence about the Common Market, but at the same time she can put legislation through that is collaborating with the Common Market to provide greater revenue for it, without any approval being required from the House after the Bill has been passed.
The Minister is being churlish in the extreme in not accepting these amendments. It is worth pointing out that the ordinary citizen, having obtained the Bill with the amendments incorporated, could say, "That is a lot of money into the Common Market, would that money not be better spent on research into the depletion of the ozone


layer?", as was suggested in an intervention earlier. Many citizens would say that it was right to do that rather than to fritter the money away on this lavish organisation which has done little for this country. We still have a balance of trade deficit in manufactured goods of more than £10 billion. Since 1984, we have spent nearly £5 billion on the Common Market; indeed, the Minister has said that since 1984 there has been an accelerated decline in Community receipts, which has produced that massive deficit in our financial arrangements with the Common Market.
I suggest that the Minister would not lose anything by allowing these amendments. The citizen would gain some information. Frankly, to maintain the reputation of the House as a source of legislation, we should always have in mind the ordinary citizen and, if something is easier and clearer for him and saves him some money in obtaining that information, we should be prepared to legislate for it. It may be that the Euro-fanatics are apprehensive because the Common Market is in such a mess, the agricultural policy is in a mess—[Interruption.]

Mr. Skinner: Do you mean Dr. Death?

Mr. Cryer: I was just coming to him.

Mr. Skinner: I do not know whether my hon. Friend has noticed. but a lot of the Euro-fanatics have not been here. Dr. Death, who leads the provos, has not been here at all. The Liberals have been represented by the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) who has never opened his gullet. Where are they? The Scot Nats, who are converted Euro-fanatics, have not been represented. It is strange that when we are discussing this wonderful institution that has cost Britain about £5,000 million net since the Prime Minister came into power, all the people who used to support it—Shirley Poppins, Roy of the Radicals and all the rest—are not here.

The Second Deputy Chairman: Order. The hon. Member for Bradford, South (Mr. Cryer) was speaking directly to the amendments before that intervention. I hope that he will continue to do so.

Mr. Cryer: If the people who support the Common Market feel that the inclusion of this information through the approval of amendment Nos. 14 and 15 would be a disadvantage to their cause, why are they not here to point that out? The Minister did not mention that in his speech. He did not say that this would be propaganda for those people who are critical of the Common Market. I believe that the citizen has a right to information, whether it gives him the right to criticise or to support the Common Market. It is for the citizen to make his judgment.
Curiously enough, that is the kind of argument that the Government normally embrace philosophically. They say that we should give the people information and let them make the choice. That is the way in which they talk about privatisation. There have to be two or three buses so that there are two or three choices. All the publicly owned monopolies must be hived off, so that there is a choice of 14 water companies in one street. On this occasion, the citizen will be denied the information in legislation passed by the House. That is quite wrong.
It is not a huge point, but we, as ordinary citizens, have been fortunate enough to be elected as Members, and we should safeguard legislation for the 54 million or 55 million other citizens. We should give them a decent

opportunity to look at the legislation and make their own judgment about it, especially when it concerns this wretched organization—the Common Market.

Mr. Teddy Taylor: The hon. Member for Bolsover (Mr. Skinner) has just said that since 1979 there has been a net payment of £5 billion to the EEC. I have received a written answer from the Paymaster General, who said that up to 1987 it was £7·5 billion.

Mr. Cryer: The deficit is even worse than was anticipated—£7·5 billion. The point that my hon. Friend the Member for Bolsover (Mr. Skinner) was making was that, although this deficit is enormous, and is grist to the mill of the critics of the Common Market, the right hon. Member for Old Bexley and Sidcup (Mr. Heath), the Euro-fanatic par excellence, and the right hon. Member for Plymouth, Devonport (Dr. Owen) are not here to defend it. That critical information is not in amendments Nos. 14 and 15 incorporating the schedules that my hon. Friend the Member for Newham, South has so prudently decided to table.
The deficit information is not included in the amendments, so it does not provide the anti-Marketeers —there are more of them than the Committee might think and I believe that that was why the Prime Minister was so adamant in her speech at Bruges—with a cause. There is no reason for the Minister to turn down this amendment except that, historically, such a course of action has never been taken.
6 pm
Historically, we did not have an electrified railway line between London and Leeds, but that did not mean that we should not have one. If British Rail had made such an application to the Minister, I am sure that he would have replied, "You want X million pounds to electrify the railway line, but historically there has never been such a line, so we should not have one." One could apply that daft argument to all sorts of things. As it happens, this House is the sort of place where it gains more credence We still have the leather, the oak and the procedures that have been with us for hundreds of years.
If it is said that, historically, we have always followed one course of action, people tend to suspend their analysis of it. People tend to believe that we should go on as we are, but if a new course of action is intended to improve things for the citizen we should undertake that action.
The Minister has not produced a scintilla of evidence or justification for his obdurate, unhelpful and antidemocratic decision. This is the right context for such an anti-democratic decision because the Common Market is an anti-democratic organisation. To bring us into line, we have to fudge, obscure and pour out documents that have the crucial information buried in paragraphs—by and large, that information is denied to the ordinary citizen.
My hon. Friend the Member for Newham, South is Chairman of the European Legislation Committee and he spends hours burrowing through documents. The hon. Member for Southend, East (Mr. Taylor), along with one or two other hon. Members, performs a similar job. They burrow through documents to get out the information, because one of the techniques of the Common Market is to bury things deep in obscure paragraphs. When people ask under what authority and under what chapter of


English law a certain decision was reached, there is a lot of humming and hawing and, eventually, an obscure instrument is produced.
Regulation 2891/77 is the instrument which authorises much of the money for the European Community from the United Kingdom. I wonder how many citizens in our respective constituencies are busy chattering about it? I do not imagine that it is talked about in Bradford, South.
I believe that, underneath it all, the Minister is a Euro-fanatic. As I recall, he was a Heathite at one stage. I know that that represents the kiss of death in the Tory party these days and that a lot of people want to shake off that image. That streak of Euro-fanaticism, however, is still there and characterises the Minister's attitudes.

Mr. Budgen: The hon. Gentleman is making a splendid speech that will make him extremely popular on the Tory Benches today. We understand, however, that the Labour party has now become committed to the EEC and is particularly anxious to exploit the generosity of the Euro-Socialism that is to be made possible by the extra money that we are discussing. Many of the hon. Gentleman's constituents must be disgusted at the way in which the voters have denied Socialists the opportunity of carrying out their splendid and progressive policies—

The Second Deputy Chairman: Order. I do not believe that we need to go into all of that now. This is an extremely long intervention and the hon. Member for Wolverhampton, South-West (Mr. Budgen) should come to his point.

Mr. Budgen: Of course I will.
Given that the hon. Member for Bradford, South (Mr. Cryer) is so rude about the absence of Dr. Death and all the rest of them, is there anyone from the Labour party who will explain today how this money will be used to create the Socialists' new Jerusalem?

The Second Deputy Chairman: Order. The hon. Member for Bradford, South (Mr. Cryer) will not do that —he will refer to the amendments before us.

Mr. Cryer: Amendments Nos. 14 and 15 are linked to amendment No. 13 and as you will be aware, Miss Boothroyd, it is not possible to give the hon. Member for Wolverhampton, South-West (Mr. Budgen) the necessary explanation. In any case I would not be able to pursue his argument because the resolution at the Labour party conference was not passed by the necessary two thirds majority. Therefore, retaining the right of withdrawal is still there and is still Labour party policy.
We have no control over an Act which enables an increase in revenue for the Common Market. I believe that we shall win the battle of ideas and form the next Government. I do not believe that we can bypass the problems and I do not believe that we shall get things done by going through the European Community. I do not know of many people who have that illusion. The truth of the matter, however, is that, irrespective of the political views of many people in the Common Market, there is one overwhelming unifying principle which is held by those on the extreme Right, by the Christian Democrats and by the Socialist group—excluding the British Labour group who, I am happy to say, do not go along with it—and that is the

creation of the united states of western Europe. Some of the money that we are discussing will go towards such a unification.
It is important that amendments 13, 14 and 15 are accepted so that the citizen is able to undertake some sort of examination of where the money goes. I note that the right hon. Member for Plymouth, Devonport—a Euro-fanatic—has just entered the Chamber. He is probably here to vote in favour of the Government denying the ordinary citizen the information to which he or she has every right.
It staggers me that the Government, who proclaim freedom of choice for the individual, are denying information and an element of choice to the ordinary citizen. The more people know the true face of Toryism, the more they will set their faces against it.

Mr. Richard Shepherd: The amendments moved so eloquently by the hon. Member for Newham, South (Mr. Spearing) go far beyond offering instructions or advice to the British people. I believe that they mandate the British Government, under British law, to abide by the financial constraints that the Government have entered into by agreement. From the line that my right hon. Friend has taken, it appears that the Government are nervous of such a situation because it inhibits or restrains their ability to negotiate large sums of money when this agreement falls apart, as many of us believe it inevitably will.
As my right hon. Friend has pointed out, he is an old hand in such debates. He is perfectly well aware that the assurances that the Government have given on a number of occasions have been treated with some scepticism, and no wonder. Every time the Prime Minister goes to Europe and announces that we shall constrain expenditure and bring in decent controls, she then comes back and we pay more. There is a certain other-wordly quality about such an attitude. On the one hand, the Government strike the ground and state that we shall pay less, yet, time after time, we accommodate large increases of expenditure outside the easy review of British law.
The amendments are important because they mandate the Government to abide by British law, which would reinforce all the disciplines that the Government are so confident will be effective. If the Government are so confident that the disciplines that have been entered into will be effective, surely it is an easy thing for the Government to say that they welcome the inclusion, in British statute law, of the new schedules.
The very reluctance of the Government to incorporate such schedules appears to reinforce the argument that the Government are nervous of their incorporation on the basis that revenue increases could be challenged in British law courts by British citizens on the basis of British law.

Sir Russell Johnston: I feel obliged to say a brief word in defence of the world-weary and indubitably much maligned Minister. I say "brief', despite the fact that long-windedness is clearly the order of the day. The Minister rejected the amendments of the hon. Member for Newham, South (Mr. Spearing) with the simplest and most proper of reasons—to wit, that they would make no difference whatever to the legal consequence of the Bill. I must say to the hon. Member for Aldridge-Brownhills (Mr. Shepherd) that Bills are supposed to be, not encyclopaedias of knowledge, but statements of the law. I would have


thought that the hon. Member for Wolverhampton, South-West (Mr. Budgen), who has a passing knowledge of the law, would find it desirable that legislation be brief, not long-winded. Therefore, I do not see any point in making the proposed addition.

Mr. Skinner: What about the hon. Gentleman's dead parrot?

Sir Russell Johnston: My dead parrot is dead, and I would be obliged if the hon. Gentleman would not exhume it.

Mr. Skinner: The hon. Gentleman backed it for 24 hours.

Sir Russell Johnston: I am sure, Miss Boothroyd, that you will protect me.

The Second Deputy Chairman: Certainly against the hon. Member for Bolsover (Mr. Skinner).

Sir Russell Johnston: We have now debated for more than two hours an amendment which would make no difference to the legal consequence of the Bill, and we should now desist. If there is a vote, I shall certainly vote against the amendment.

Sir Richard Body: I shall make a short point, because this important debate has taken a substantial time.
I am troubled. I ask my right hon. Friend the Paymaster General to consider that this would not be tolerated in the Danish Parliament. In Denmark, Parliament is insistent that maximum information is given to the Danish people on matters such as this. Danish parliamentarians are much better informed about every regulation and decision passed by the Council of Ministers. We already know that this House was unaware of the regulation about the way in which the Council of Ministers could draw on extra funds from the British people and the rest of the Community, to which my right hon. Friend drew our attention. In Denmark there is a willingness, almost an eagerness, on the part of the Danish Government to keep Parliament well informed.

Sir Russell Johnston: Is the hon. Gentleman aware that the Danish Parliament is elected by proportional representation, so genuinely reflects the views of the Danish people?

Sir Richard Body: I am sorry that the hon. Gentleman, for whom I have the greatest regard, intervened in that way. I am trying to make a short point after a long debate and I hope that I may make it without taking up much time. This is an important Bill and there are other amendments which we wish to consider and debate properly. I hope that the hon. Gentleman will take part in that and that it is noted outside that he is the only Liberal —or Democrat, or whatever we call them now—to take any interest in this debate.
Why cannot we follow the example of the Danish Parliament and make this information available to the British people? This decision has considerable constitutional consequences, but the British people will be wholly unacquainted with it unless we take steps to acquaint them with it. Yet we are trying to suppress information. That is unsatisfactory, and anyone who wants the EC to succeed will agree that there is no point in suppressing information, unless it is for the reason that

the hon. Member for Bradford, South (Mr. Cryer) gave us earlier. The more one reflects on it, the more plausible that explanation seems.
For those reasons, I ask my right hon. Friend to reconsider the matter and concede that what is good enough for the Danish people and the Danish Parliament should be good enough for the British people and the House of Commons.

Mr. Marlow: I should like to reinforce the point made with great eloquence by my hon. Friend the Member for Aldridge-Brownhills (Mr. Shepherd).
My right hon. Friend the Minister debated the subject of financial control. We know that the Government are deeply concerned about the financial control of Community resources and have not been happy about the way in which that control has been exercised. One of our main duties in Parliament is to ensure proper financial control of taxpayers' money. When the Bill was introduced, the Community had financial problems. It was short of cash. But now we know that its coffers are overflowing. It has not had the expenditure that it expected, so has money in reserve. It has spare cash. The urgency for the Bill is nothing like as great as previously. There is no urgency. We can delay.
My hon. Friend suggested—this should meet with the agreement of my right hon. Friend—that we should add these schedules to the Bill. If we add them, will it weaken the power of our constituents to take a case against the EC for financial imprudence? Should it start spending money which it should not spend? Now it has the problem under control, but should it start being extravagant again? If one of my constituents wanted to take a case against the Community institutions, would he be in a weaker position if we agreed to the schedules? If not, my right hon. Friend, like me, would wish to give my constituents all the power we could. Therefore, I plead with him to agree to the amendments, so eloquently moved by the hon. Member for Newham, South (Mr. Spearing).

Mr. Spearing: I rise to reply to this debate, which has taken longer than I expected. Its contents have vindicated the wisdom of Committee procedure because although we have debated whether these two schedules should be included in the Bill, we have, en passant, debated two other important points which otherwise might never have been pinpointed in the clause stand part debate.
The first relates to the undertaking in proposed new schedule 2. Is it necessary? That question has not been fully answered. We extracted from the Financial Secretary the obscure regulation of 1977 under which certain payments have been or are about to be made. The explanation was not entirely convincing, because at one stage—I shall have to read Hansard on this—the Minister said that the payments would not exceed resources known to be available.
It is true that resources will be available if the undertaking is ratified by other states, but we cannot assume that. on another occasion he said that the payments would not exceed those which could be made under existing arrangements. Existing arrangements could include the detailed article 12(2) of the 1977 regulation for forward payments. That is still unclear, although we have had something of a question and answer session on it. I


must pay tribute to the patience of the Paymaster General, but he must give an answer on financial matters. These are matters not of judgment but of strict financial formulae.
The second point relates to new schedule 1, if it were accepted. What part of the decision set out in new schedule I would contain the discipline which we have been promised and assured of? The right hon. Member for Worthing (Mr. Higgins), who is the Chairman of the Select Committee on Treasury and Civil Service, asked what part of the new schedule would guarantee that discipline in Community law or United Kingdom law. But answer came there none, apart from a statement that it was contained in other documents about agricultural stabilisers that had subsequently been passed and given legal effect by the European Community.
The hon. Member for Skipton and Ripon (Mr. Curry) knowledgeably underlined that point. However, as I recollect the evidence given by the Minister of Agriculture, Fisheries and Food to the Select Committee that I have the honour to chair, there is no certainty in that. Agricultural stabilisers have more to do with hope than certainty.
I pay tribute to the Paymaster General for providing what answers he could, but I discern no mechanism of discipline in new schedule 2 or, for that matter, in the proposed decision before us. This could therefore be classified as a Fontainebleau mark II.
The Minister said, with his customary courtesy, that the amendment was unnecessary, but his remarks showed that to be untrue. He kindly said that the Committee was in our debt for putting the texts on the Order Paper. But if its members, who are a little acquainted with these matters—I put it no higher than that—find it convenient to have these details set out on the Order Paper, a document that we can obtain 10 yards away, so, too, would the people whom we represent.
At this point I want to answer the cogent point made by the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston). He was right to say that the amendment neither adds to nor detracts from the legal effect of the Bill, but I am sure that on other occasions, dealing with other matters, he would be the first to criticise a Minister who brought before a Committee a couple of clauses of gobbledegook. If the hon. Gentleman or one of his hon. Friends tabled an alternative form of clause, or an expansion of a clause, making clearer what was involved in it but entailing no legal change, he would be the first to criticise any Government that did not accept such an expansion or clarification. We are as much concerned here with the quality of legislative drafting as with the Bill's contents. All hon. Members can say amen to that, even if the Treasury cannot. To date it has not said amen to it, and I am sorry that it has not. It has been burrowing hard trying to find additional reasons such as those that the right hon. Gentleman gave us why the amendments should not be accepted.
The right hon. Gentleman said that such an inclusion had not been made in 1985 and asked why it should be made now. My hon. Friend the Member for Bradford, South (Mr. Cryer) disposed of that with his timely and apposite electrification example: we have not had electrified lines in Bradford and Leeds until now, so why should we have them in future? Yet the Government have paid for that electrification.
I have a better argument still. The Paymaster General said that this had not been done before; no more it had. But the so-called disciplinary mechanisms did not work either last time, and because of that it is all the more important that we should have them this time. I hope the Minister understands that. No doubt the scribes in the Treasury have been working hard on the Minister's reasons and I do not blame him for using them.
The Minister said, that in 1972, when we took on board all the then treaties of the European Community under the European Communities Act, we did not print them, either. I believe I have the advantage of the right hon. Gentleman in having attended those debates, and I can tell hon. Members why the treaties were not printed in the schedules to that Bill—95 treaties were hoisted aboard at that time. I remember going into the public library in Ealing, Acton, which I then represented, with the treaties on my shoulder piled up two feet high. As I remember, none of them was about the obligations of taxation. The money that we paid in then was given under an entirely different formula, not the own resources formula of today.
Now we have a treaty which is, in effect, a taxation instrument, and a member of the Treasury is telling us that, although this is a taxation document, we shall not print it in the Bill. How is that for open government? It is a trend towards authoritarianism. I suggest that the reasons the right hon. Gentleman gave for not including the amendment were not good ones, so his refusal does not carry the weight that his arguments usually do.
This has been a useful debate and in other circumstances we would have pressed it to a—

Mr. Skinner: We will.

Mr. Spearing: I shall explain why I was not going to. If, for the time being, we accept what the Minister has said, we shall always be able to say that the Treasury favours obfuscation and denial of information to the House and the people of this country. The Treasury is doing this in a matter of taxation under a formula that is to be adopted for the next five years. With that wrapped around the Treasury's neck from this evening onward, it might have second thoughts in another place, or later in the Bill's progress. I believe that would be for the best. The Government could never get out of this—but I leave the decision to the will of the Committee. The Government have every reason to accept the amendments, especially after the Prime Minister's speech at Bruges. The spirit in which they are moved is compatible with some of her remarks. I hope that, even at this late stage, the Paymaster General will change his mind.

Question put, That the amendment be made:—

The Committee divided: Ayes 106, Noes 284.

Division No. 450]
[6.27pm


AYES


Aitken, Jonathan
Bray, Dr Jeremy


Armstrong, Hilary
Brown, Nicholas (Newcastle E)


Ashton, Joe
Buckley, George J.


Banks, Tony (Newham NW)
Budgen, Nicholas


Barnes, Harry (Derbyshire NE)
Caborn, Richard


Battle, John
Campbell-Savours, D. N.


Beckett, Margaret
Clark, Dr David (S Shields)


Bell, Stuart
Clay, Bob


Benn, Rt Hon Tony
Clelland, David


Bennett, A. F. (D'nt'n &amp; R'dish)
Coleman, Donald


Bermingham, Gerald
Cook, Frank (Stockton N)


Body, Sir Richard
Corbett, Robin


Boyes, Roland
Cousins, Jim






Crowther, Stan
McKay, Allen (Barnsley West)


Cummings, John
McKelvey, William


Davies, Ron (Caerphilly)
McLeish, Henry


Dixon, Don
Marlow, Tony


Dobson, Frank
Meacher, Michael


Doran, Frank
Meale, Alan


Dover, Den
Michael, Alun


Dunwoody, Hon Mrs Gwyneth
Michie, Bill (Sheffield Heeley)


Eadie, Alexander
Morley, Elliott


Eastham, Ken
Mowlam, Marjorie


Ewing, Harry (Falkirk E)
Mullin, Chris


Fatchett, Derek
O'Brien, William


Flynn, Paul
Patchett, Terry


Foot, Rt Hon Michael
Pike, Peter L.


Foster, Derek
Powell, Ray (Ogmore)


Foulkes, George
Prescott, John


Garrett, Ted (Wallsend)
Primarolo, Dawn


George, Bruce
Redmond, Martin


Golding, Mrs Llin
Reid, Dr John


Gordon, Mildred
Rogers, Allan


Gorman, Mrs Teresa
Rooker, Jeff


Grant, Bernie (Tottenham)
Ross, Ernie (Dundee W)


Grocott, Bruce
Sedgemore, Brian


Hardy, Peter
Shepherd, Richard (Aldridge)


Haynes, Frank
Short, Clare


Heffer, Eric S.
Smith, C. (Isl'ton &amp; F'bury)


Henderson, Doug
Soley, Clive


Hinchliffe, David
Spearing, Nigel


Hogg, N. (C'nauld &amp; Kilsyth)
Steinberg, Gerry


Holland, Stuart
Strang, Gavin


Home Robertson, John
Taylor, Teddy (S'end E)


Hoyle, Doug
Thompson, Jack (Wansbeck)


Hughes, John (Coventry NE)
Townend, John (Bridlington)


Hughes, Roy (Newport E)
Turner, Dennis


Illsley, Eric
Vaz, Keith


Ingram, Adam
Wall, Pat


Kaufman, Rt Hon Gerald
Williams, Alan W. (Carm'then)


Lamond, James
Wilson, Brian


Leighton, Ron



Lloyd, Tony (Stretford)
Tellers for the Ayes:


McAllion, John
Mr. Bob Cryer and


McAvoy, Thomas
Mr. Dennis Skinner.




NOES


Alexander, Richard
Brooke, Rt Hon Peter


Alison, Rt Hon Michael
Brown, Michael (Brigg &amp; CI't's)


Allason, Rupert
Browne, John (Winchester)


Amess, David
Bruce, Ian (Dorset South)


Amos, Alan
Buck, Sir Antony


Arbuthnot, James
Burns, Simon


Arnold, Jacques (Gravesham)
Burt, Alistair


Ashby, David
Butcher, John


Aspinwall, Jack
Butler, Chris


Atkinson, David
Butterfill, John


Baker, Rt Hon K. (Mole Valley)
Campbell, Menzies (Fife NE)


Baker, Nicholas (Dorset N)
Carlisle, Kenneth (Lincoln)


Baldry, Tony
Carrington, Matthew


Banks, Robert (Harrogate)
Carttiss, Michael


Barnes, Mrs Rosie (Greenwich)
Cartwright, John


Batiste, Spencer
Cash, William


Bellingham, Henry
Channon, Rt Hon Paul


Bendall, Vivian
Chapman, Sydney


Bennett, Nicholas (Pembroke)
Chope, Christopher


Benyon, W.
Clark, Dr Michael (Rochford)


Bevan, David Gilroy
Clarke, Rt Hon K. (Rushcliffe)


Biffen, Rt Hon John
Colvin, Michael


Blackburn, Dr John G.
Conway, Derek


Bonsor, Sir Nicholas
Coombs, Anthony (Wyre F'rest)


Boscawen, Hon Robert
Coombs, Simon (Swindon)


Boswell, Tim
Cope, Rt Hon John


Bottomley, Mrs Virginia
Cormack, Patrick


Bowden, A (Brighton K'pto'n)
Couchman, James


Bowden, Gerald (Dulwich)
Cran, James


Bowis, John
Currie, Mrs Edwina


Boyson, Rt Hon Dr Sir Rhodes
Curry, David


Braine, Rt Hon Sir Bernard
Davies, Q. (Stamf'd &amp; Spald'g)


Brandon-Bravo, Martin
Day, Stephen


Brazier, Julian
Devlin, Tim


Bright, Graham
Dickens, Geoffrey


Brittan, Rt Hon Leon
Dorrell, Stephen





Douglas-Hamilton, Lord James
Kirkhope, Timothy


Dunn, Bob
Knapman, Roger


Durant, Tony
Knight, Greg (Derby North)


Dykes, Hugh
Knight, Dame Jill (Edgbaston)


Emery, Sir Peter
Knowles, Michael


Evans, David (Welwyn Hatf'd)
Knox, David


Evennett, David
Lamont, Rt Hon Norman


Ewing, Mrs Margaret (Moray)
Lang, Ian


Fallon, Michael
Latham, Michael


Fenner, Dame Peggy
Lee, John (Pendle)


Field, Barry (Isle of Wight)
Leigh, Edward (Gainsbor'gh)


Finsberg, Sir Geoffrey
Lennox-Boyd, Hon Mark


Fishburn, John Dudley
Lightbown, David


Fookes, Miss Janet
Lloyd, Sir Ian (Havant)


Forman, Nigel
Lloyd, Peter (Fareham)


Forsyth, Michael (Stirling)
Lord, Michael


Forth, Eric
Luce, Rt Hon Richard


Fowler, Rt Hon Norman
Lyell, Sir Nicholas


Fox, Sir Marcus
Macfarlane, Sir Neil


Freeman, Roger
MacGregor, Rt Hon John


French, Douglas
MacKay, Andrew (E Berkshire)


Fry, Peter
Maclean, David


Gale, Roger
McLoughlin, Patrick


Gardiner, George
McNair-Wilson, Sir Michael


Gilmour, Rt Hon Sir Ian
McNair-Wilson, P. (New Forest)


Glyn, Dr Alan
Major, Rt Hon John


Goodhart, Sir Philip
Malins, Humfrey


Goodlad, Alastair
Mans, Keith


Goodson-Wickes, Dr Charles
Maples, John


Gorst, John
Marland, Paul


Gow, Ian
Marshall, Michael (Arundel)


Gower, Sir Raymond
Martin, David (Portsmouth S)


Grant, Sir Anthony (CambsSW)
Mates, Michael


Greenway, Harry (Ealing N)
Maxwell-Hyslop, Robin


Greenway, John (Ryedale)
Mayhew, Rt Hon Sir Patrick


Gregory, Conal
Mellor, David


Griffiths, Peter (Portsmouth N)
Miller, Sir Hal


Grist, Ian
Mills, Iain


Ground, Patrick
Mitchell, Andrew (Gedling)


Gummer, Rt Hon John Selwyn
Mitchell, David (Hants NW)


Hamilton, Hon Archie (Epsom)
Monro, Sir Hector


Hamilton, Neil (Tatton)
Moore, Rt Hon John


Hanley, Jeremy
Morris, M (N'hampton S)


Hannam, John
Morrison, Rt Hon P (Chester)


Hargreaves, A. (B'ham H'll Gr')
Moss, Malcolm


Hargreaves, Ken (Hyndburn)
Mudd, David


Harris, David
Neale, Gerrard


Haselhurst, Alan
Nelson, Anthony


Hawkins, Christopher
Nicholls, Patrick


Hayhoe, Rt Hon Sir Barney
Nicholson, David (Taunton)


Hayward, Robert
Nicholson, Emma (Devon West)


Heathcoat-Amory, David
Onslow, Rt Hon Cranley


Heddle, John
Oppenheim, Phillip


Heseltine, Rt Hon Michael
Paice, James


Higgins, Rt Hon Terence L.
Parkinson, Rt Hon Cecil


Hill, James
Patnick, Irvine


Hogg, Hon Douglas (Gr'th'm)
Patten, Chris (Bath)


Holt, Richard
Pattie, Rt Hon Sir Geoffrey


Hordern, Sir Peter
Pawsey, James


Howarth, Alan (Strat'd-on-A)
Peacock, Mrs Elizabeth


Howarth, G. (Cannock &amp; B'wd)
Portillo, Michael


Howell, Ralph (North Norfolk)
Powell, William (Corby)


Hughes, Robert G. (Harrow W)
Price, Sir David


Hunt, David (Wirral W)
Raffan, Keith


Hunt, John (Ravensbourne)
Raison, Rt Hon Timothy


Hunter, Andrew
Rathbone, Tim


Hurd, Rt Hon Douglas
Redwood, John


Irvine, Michael
Renton, Tim


Irving, Charles
Rhodes James, Robert


Jackson, Robert
Riddick, Graham


Janman, Tim
Ridsdale, Sir Julian


Jessel, Toby
Roberts, Wyn (Conwy)


Johnson Smith, Sir Geoffrey
Roe, Mrs Marion


Johnston, Sir Russell
Rossi, Sir Hugh


Jones, Gwilym (Cardiff N)
Rost, Peter


Jones, Robert B (Herts W)
Rowe, Andrew


Kellett-Bowman, Dame Elaine
Rumbold, Mrs Angela


Kennedy, Charles
Sackville, Hon Tom


Key, Robert
Sainsbury, Hon Tim


King, Roger (B'ham N'thfield)
Sayeed, Jonathan






Scott, Nicholas
Townsend, Cyril D. (B'heath)


Shaw, David (Dover)
Tracey, Richard


Shaw, Sir Giles (Pudsey)
Tredinnick, David


Shaw, Sir Michael (Scarb')
Twinn, Dr Ian


Shelton, William (Streatham)
Vaughan, Sir Gerard


Shepherd, Colin (Hereford)
Waddington, Rt Hon David


Shersby, Michael
Wakeham, Rt Hon John


Skeet, Sir Trevor
Walden, George


Smith, Sir Dudley (Warwick)
Wallace, James


Smith, Tim (Beaconsfield)
Waller, Gary


Soames, Hon Nicholas
Walters, Sir Dennis


Spicer, Michael (S Worcs)
Ward, John


Squire, Robin
Wardle, Charles (Bexhill)


Stanbrook, Ivor
Warren, Kenneth


Steel, Rt Hon David
Wheeler, John


Steen, Anthony
Whitney, Ray


Stern, Michael
Widdecombe, Ann


Stevens, Lewis
Wilkinson, John


Stewart, Andy (Sherwood)
Wilshire, David


Stradling Thomas, Sir John
Wolfson, Mark


Summerson, Hugo
Wood, Timothy


Tapsell, Sir Peter
Yeo, Tim


Taylor, John M (Solihull)
Young, Sir George (Acton)


Taylor, Matthew (Truro)



Tebbit, Rt Hon Norman
Tellers for the Noes:


Thompson, Patrick (Norwich N)
Mr. Tristan Garel-Jones and


Thorne, Neil
Mr. Michael Neubert.


Thurnham, Peter

Question accordingly negatived.

app

Motion made and Question proposed, That the clause stand part of the Bill.

The Second Deputy Chairman: With this question it will be convenient to discuss also new clause 3—Annual Report to Parliament—
'Each year Her Majesty's Government shall make an annual report to Parliament concerning the operation of the decision in section 1(e) above in respect of the preceding financial year, which shall include:

(a) A general presentation in text and tables of the financing and expenditure of the European Economic Communities in sterling equivalent and any common unit, which shall include comparable tables of income derived from each member state and expenditure therein in respect of each principal category of expenditure;
(b) An account of rebate mechanisms applicable to any member state;
(c) The operation of each article of the decision;
(d) Action taken by Her Majesty's Government in respect of financial discipline;
(e) The operation of that part of the decision referred to as the "EAGGF monetary reserve";
(f) The text of any regulation, directive or financial regulation relating to the operation of the decision to which Her Majesty's Government have given their assent.'.

Mr. Cryer: On a point of order, Miss Boothroyd. I was one of the Tellers and I thought that I caught sight of Tory Whips taking names outside the Aye Lobby. I did not see the documents that they held, but I presume that they were taking the names of Conservative Members who chose to exercise their rights, on behalf of the citizen, to ask for more information to be provided. Can you confirm, Miss Boothroyd, that under Standing Orders hon. Members cannot be intimidated by any clique of Tory Whips into voting one way or another? I should be grateful if you would confirm that.

The Second Deputy Chairman: Of course I can confirm that. I doubt whether there is an hon. Member who allows himself or herself to be intimidated. We shall now continue with clause 1 stand part.

Mr. Marlow: On a point of order, Miss Boothroyd. If I could put the record straight—

The Second Deputy Chairman: Order. I have put the record straight. I call Mr. Holland.

Mr. Holland: It shows how badly we need a debate on the substantive issues raised in the Bill that we have spent so long on the importance—

Mr. Spearing: On a point of order, Miss Boothroyd. Do I take it that the clause stand part has been moved formally and that we have had no speech from the Paymaster General in moving it?

The Second Deputy Chairman: The procedure is that clause 1 stand part is proposed from the Chair. If the Paymaster General were to rise, I would obviously, out of courtesy, call him first. It seems that the Opposition wish to make the opening remarks, and that is perfectly in order.

Mr. Holland: Whether or not we should add schedules to the Bill, we are debating substantive issues, to which we need to pay considerable attention. It would have helped us a great deal if the schedules had been published as part of the Bill and were to be part of the Act.
Essentially, clause 1 deals with the decision of the Council of the European Communities on own resources, made in Brussels on 7 May 1985 and with the undertaking made in Brussels on 23 and 24 April 1985 by representatives of the Governments of the member states to make payments to the Community. It also deals with the decision of the Council of the European Communities on own resources made in Luxembourg on 24 June 1988 and with the undertaking by representatives of the Governments of the member states, which was confirmed in Luxembourg on 24 June 1988. That means that there has been a shift in the basis of the financing of the Community and that was made explicit in the Luxembourg agreement of 24 June.
Article 2 of our proposed schedule 1 states:
Revenue from the following shall constitute own resources entered in the budget of the Communities:

(a) levies, premiums, additional or compensatory amounts …
(b) Common Customs, Tariff duties …
(c) … the VAT assessment base …
(d) the application of a rate … to the sum of all the Member States' GNP established in accordance with Community rules to be laid down in a Directive".

Apparently, a proposal for a directive is to be made.
6.45 pm
Article 3 spells out the significance of what we have to consider. Paragraph 1 states:
The total amount of own resources assigned to the Communities may not exceed 1·20% of the total GNP … for payment appropriations.
The total amount of own resources assigned to the Communities may not … exceed
for the period 1988–92 a range of from 1·15 per cent. in 1988 to 1·20 per cent. in 1992. Therefore, we are debating not only the Community's current budget but its budget up until 1992. I think that you will agree, Miss Boothroyd, that it is therefore appropriate that the House should address the issue of what the Community will be doing with that budget in the period up to 1992 and the way in which the resources will be spent.

Mr. Spearing: As the House is in Committee, Miss Boothroyd, may I make the point for the record that my hon. Friend has rightly referred to a directive which he believes is to come, relating to the definitions of GNP on which the rate to which he has just referred will be applied? It is a significant calculation, because a small difference in the formula could make a difference, over a period, of £1,000 million or more. My recollection was that that directive has already been published. I think that it is 5647/88, which has been referred here for debate by the Select Committee on European Legislation. I hope that it will not be considered as being taken finally today, although it may be considered as having been debated, because I think that it was referred to in an earlier debate. It is not a question of that directive coming; it has come and is available in text form.

Mr. Holland: I am grateful to my hon. Friend. I have the text with me although I might not have had. I used the word "proposal" because under the heading "Subject Matter" in the explanatory memorandum, I read the words:
This is a Commission proposal for a directive on the harmonisation of definitions of GNP.
I was going to come to that a little later, but as my hon. Friend has given me this chance, I should like to say that it is indeed an important issue in as much as VAT contributions can be determined ex post facto in relation to the amount of VAT that has actually been paid in a particular country because one can take x per cent. of that.
The definition of GNP is much more complex. I appreciate that definitions of national product or national income are items which pass readily into the library of the great unread, except perhaps for those students of economics who, for a week or two, are supposed to address such issues and grasp their most basic definitions. There are differences in the way in which GNP is assessed and calculated in different Community countries. As I understand it, a committee is to be established. The document that we are considering confirms that there is a proposal under item 4 of the document to provide for an advisory committee, consisting of technical experts from the Commission and member states to assess the quality and comparability of the figures put forward by the different member states.
We also need to make sure that that committee, which presumably will be chaired by a member of the Commission and will, I believe, report to the President of the Commission, will be looking not simply at conventional definitions of GNP but at the means by which we can get greater transparency of the way in which the funds of the Community are being spent and on the way in which the system of aid, whether under structural funds or regional funds, is being operated. It might also look at the effectiveness with which resources within the Community are being used. There is relatively little transparency on those matters in the Community and it is extremely important that the House should be able to gain an effective evaluation of what is happening.
I believe that it is in order to refer also to new clause 3, in the name of my right hon. Friend the Leader of the Opposition and other of my right hon. and hon. Friends. It states:
Each year Her Majesty's Government shall make an annual report to Parliament concerning the operation of the decision in section 1(e) above".

That refers to the decisions of May 1985 and June 1988 on the manner in which the contributions from member states to the Community budget are assessed.
We regard it as important that there should be, as the new clause states,
(a) A general presentation in text and tables … in respect of each principal category of expenditure;
(b) An account of rebate mechanisms applicable to any member state".
That is directly relevant to the United Kingdom case. The new clause continues:
(c) The operation of each article of the decision".
That involves the decision-making procedure within the Community as well as of the Community institutions, in other words the Council, the Parliament, the Commission and other bodies, and the relations between them.
Paragraph (d) states:
Action taken by Her Majesty's Government in respect of financial discipline".
That is a matter on which many contributions have been made by hon. Members on both sides of the House, in relation to stabilisers, destabilisers and guarantees that expenditure under the guidance and guarantee fund will be reduced.
The new clause continues:
The operation of that part of the decision referred to as the "EAGGF monetary reserve";
(f) The text of any regulation, directive or financial regulation relating to the operation of the decision to which Her Majesty's Government have given their assent.
I strongly recommend the new clause to the House. I trust that we shall gain a response from Conservative Members on the issue.
My hon. Friend the Member for Bolsover (Mr. Skinner), who is still present, and my hon. Friend the Member for Bradford, South (Mr. Cryer), who is not here now, but who has been here for the main part of the debate, have rightly drawn attention to the manner in which Community legislation on the expenditure of public moneys is opaque rather than transparent and does not enable people to see what is being done. Without impugning the integrity of every hon. Member of the House, and whether or not each of us is equally in command of every item and iota of legislation coming from the Community, I believe that it should be incumbent on the House to ensure that the issues concerned and the supporting documentation are presented regularly. In our view, an annual report to Parliament should be a major part of the parliamentary process. Whether it was debated on one day, two days or, several days or spread over a period, it should enable hon. Members to assess, and therefore to approve or disapprove, expenditure undertaken under the new provisions before us.
Several hon. Members are especially concerned about the implications of the provisions in clause 1, in relation to the rights and privileges of the House. The argument is made that we are moving towards a federal system in which the privileges and prerogatives of the House are being undermined. That issue should be addressed by the House. None the less, it is not as straightforward as it may appear. For example, most of the provisions, which include qualified majority voting under the Single European Act, refer to the elimination of certain non-tariff barriers on a series of traded products rather than to wider issues—for example, of social or regional expenditure in the Community.
Although the words in the Single European Act, the Acte unique or the unique Act, have been applied to the internal market that will be achieved, in a real sense—perhaps my hon. Friend the Member for Bolsover will agree—1992 is about a free trade area. It is less the start of a new Europe than an effort to restart the old Europe, because the internal free trade area should have been established by the late 1960s. The failure of the Community to move sufficiently fast to establish that free trade area and to grasp and eliminate non-tariff barriers is one of the reasons why we have had to restart the process of trying to achieve a genuinely free trade area within the Community itself.
The measure of a customs union, which is also part of the classic objective of states that are seeking to integrate, has long since been achieved. Through the customs union and quota system, the revenues that I have identified are due to the Commission from levies, especially agricultural levies. Many of us would wish that form of revenue for the Commission to be reduced and finally abolished inasmuch as it is quite iniquitous that the European Community should defend, for example, the production of beet sugar as opposed to the importation of sugar from developing countries. That is a source of Commission revenue that hon. Members on both sides of the House would wish to be reduced or abolished.

Mr. Cash: Does the hon. Gentleman agree that it was in the construction of the federal constitution of Germany that the best example of a movement from customs union to ultimate federation was achieved, but it does not necessarily follow by any means that it is a model that should be used for a progression towards a similar federal system in the European Community?

Mr. Holland: I agree very much with the hon. Gentleman. The point is well made and perhaps can be illustrated by the fact that Friedrich List, the ideologue of that customs union, argued the case for freedom to trade in a Germany when there were real barriers to trade. For example, at that time there were chains across the Rhine. It was a near-feudal mosaic rather than an integrated economic area. Anyone in his right mind would argue that chains across a main waterway constitute a barrier to shipping—

Mr. George Foulkes: And to trade.

Mr. Holland: —and therefore to trade. My hon. Friend is assisting me.
It is not as clear that we need to proceed to harmonisation of other things inside the European Community to achieve equal conditions for trade. Nor is it as clear—in my view, it is wholly unclear—that we need to proceed to monetary union. One of the striking features of Germany in the 19th century—it had several, some of which were positive and some negative—was that the Zollverein— in other words, the German common market of those formerly independent states—was created without the integration of its currency. It was only after 1871 that the Bismarckian administration introduced a common currency for the countries concerned. Nobody would argue that the Zollverein had not been successful before. Some people might claim that the real industrialisation of

the German economy happened in the 1880s and 1890s rather than before 1871. Arguably that followed from Bismarck making a deal with the Liberals and ditching his Junker friends. That allowed goods in from abroad and lowered costs at a time when conditions for capital accumulation were ripe.
7 pm
I do not want to detain the House further with this Zollverein analogy, but it illustrates the need for us to be specific about what the gains or non-gains of a specific kind of European Community are likely to be. I accept that we are talking about Community expenditure up to 1992, and in that context it is relevant to refer to the so-called Cecchini report, which evaluates the costs and advantages or disadvantages of Europe up to 1992. The report, which may not be everybody's bedside reading, has a rather qualified preface by Mr. Jacques Delors which almost suggests the Mr. Delors is not quite so enthusiastic as Lord Cockfield about the internal market being achieved by 1992. He regrets that the social and regional provisions have not been entered in the Single European Act with as much force as the provisions for the liberalisation of trade.
In the Cecchini report we find among other things that there are specific arguments about the savings there will be in the cost of administering the frontier collection of revenues inside the Community,. It is not at all clear to me, but I stand subject to information on the matter, that anybody has evaluated what the reduced cost of provision would be in terms of the Community budget. But as internal customs duties are reduced in the Community, the other provisions, which include VAT and GNP assessments, become yet more important.
The Committee should try to be clear about whether the provisions of the Single European Act and the 1992 proposal mean a move towards federalism. Clearly, it depends on what we mean in the provisions, but much of the decision-making will still be intergovernmental. At present, the qualified majority voting procedure will apply only to certain categories of traded goods and non-tariff barriers.

Mr. Spearing: We should not move too far from the financial provisions before the Committee, but on the definition of the internal market, does my hon. Friend agree that, potentially, the legislation goes much further than that? As he suggests, it is not just a question of removing barriers. As I read the Single European Act group of amendments to the treaty of Rome, centralised legislation on any matter, where there would be different legislation either side of a boundary or across a sea in the Common Market, which affects industry or commerce in almost any respect is permitted. Surely that is a much greater power than many people have yet realised.

Mr. Holland: I appreciate the points that my hon. Friend makes that any tax or legislative provision can be considered indirectly to have an effect on internal markets. It may well be that the European Court will interpret matters in this way, but it is not necessary for us to have this degree of harmonisation in the Community in order to achieve a large internal market. The whole rationale of Lord Cockfield and his directorate general in the Commission has been totally misconceived about this. The European Community is dominated by about 200 companies which now account for about two fifths of its


GDP. Those multinational companies are buying permanent satellite time to monitor the trading of tens of thousands of products worldwide and are adjusting the pricing of those products to suit their own internal transfer pricing requirements. They have to live every minute and every hour of the day with foreign exchange fluctuations by leading and lagging of payments, through hedging and through speculation. Some of those companies have their own foreign exchange divisions.
Those companies can handle that on a permanent basis because they need to take decisions on instantaneous change. Therefore, the idea that a VAT rate of 15 per cent. in one country, 10 per cent. in another or zero in a third country cannot be handled by these companies seems quite meaningless. It seems that it is perfectly all right to harmonise the statutory provisions for rear view mirrors or prophylactics, but one will not give a better interpretation of the past and the other will not generate a future for a new Europe.
We need joint action from Europe in order to address the problems currently facing it. We need not only a budget to he spent by the Commission but a budget that is jointly spent by member Governments. Those joint action budgets may be for recovery programmes to take the strain in the world economy that could be caused by a reduction in the budget deficit in the United States. They could, for example, allow for joint action by Governments on environmental policy" despite the fact that there may well not be unanimity between member states about whether there should be a Community environmental policy. When nine, 10 or 11 member countries want to proceed on joint provisions for the implementation of such a policy, it should be open to any Government, sensible about a pragmatic approach to international economic co-operation, to proceed with joint programmes of this kind. Joint national budgets of that kind would of course be debated in the House because they would be presented by the Secretary of State for the Environment.
One thing that we do not have in terms of sufficient scrutiny goes beyond the terms of reference of the new clause but not beyond the implications of clause 1. It is the extent to which we can get a relationship between what the European Assembly is considering and what national parliaments are considering. At present, the two seem utterly divorced. Committees of the House monitor Community documents. As my hon. Friend the Member for Newham, South (Mr. Spearing) said, one could carry piles of documents several feet thick on almost any issue. Upended, the documents behind the Cecchini report would fill the space between these two Dispatch Boxes. I do not know who reads these reports other than their authors, the typesetters and the proof readers.
It is important that we know whether there will be a net gain or a net loss from the creation of a Community Europe and in what sense. The bottom line of the assumptions in the Cecchini report is that greater revenues will be generated for nation states by the stimulus effect of competition in the internal market. I am longer in the tooth than I should like to be, but I can say with at least the partial experience of advancing middle age that I was around when those arguments about the stimulus effect of joining the European Community were made in the 1960s and 1970s.
I can remember very well the answer given to one researcher into these matters, who went to a big multinational company. The researcher, Christopher

Layton, now Lord Layton, asked Pilkington Bros what the consequences of joining the Common Market would be for it. The person he asked smiled and replied, "Look, we are in float glass, and in float glass we are the common market."
There are fantasy views of the stimulus effects of the creation of this internal free trade area. Companies have been multinational for 20 or 25 years, have directly invested in other countries and are operating in other countries. Europe is addressing the wrong issues by being so much concerned about harmonisation. Rather than seeking to integrate, Europe should seek to co-operate, and it should set an agenda for feasible co-operation on a range of policies, more on an intergovernmental basis, perhaps with a different kind of majority voting. It could be, for example, an enabling majority vote, whereby if a majority of countries in the Community want to pursue a policy, and two or three do not, those wishing to pursue the policy should get the support of the Community institutions and should be able to have debates in national parliaments.

Mr. Marlow: Does the hon. Gentleman agree that the words summing up his policy as he has just put it would be "willing and active co-operation between nation states"?

Mr. Holland: I find myself in the slightly uncomfortable position of being in agreement with the hon. Member. But, as he formulates it, that is my idea—intergovernmental co-operation. That does not have to be ad hoc and does not have to be uninstitutionalised, because we need institutions if we are to promote an argument concerning new forms of co-operation which at present are not on the Community agenda because they are neither in the Rome treaty, nor in the so-called Single European Act, nor in the provisions which the Paymaster General this year has chosen not to publish and put plainly before us.

Sir Russell Johnston: Does the hon. Gentleman agree that from 1957 right on through the 1960s, the initial foundation of the European Community created a dynamic economic effect? Our problem is that we came in too late.

Mr. Holland: I am glad that the hon. Gentleman asked me that question, although I do not agree with him. There was a dynamic effect for the Federal Republic of Germany, and good for it. The effect was hardly so dynamic for Italy and France, which by 1963 found themselves in major balance of payments crises because of the expectations engendered by higher trade and the increased imports to those countries from West Germany, and the lack of any successful return. The result was deflationary packages in both countries in 1963 and again in the late 1960s. Furthermore, neither of those countries can successfully compete with West Germany.
That brings me to another issue, which some hon. Members raised in the debate on the previous amendment. How can any region of the European economy successfully compete against the most successful region in that economy? When, if there were a single European currency, nation states became regions within the integrated area, how could individual parts of the Community compete effectively with West Germany? It may be said that these are specific questions that should be addressed elsewhere


at some other time, but they are important in the discussions that we shall have before 1992, to which the budgetary provisions before us refer.
We have—I realise that this is not the turn-on of the year—an invitation to join the GDP reassessment committee of the Commission. Some excellent economists, even some former professional colleagues of mine, would no doubt like to join it, and I think that it is important and worth while. However, a longer list of applicants will be queuing to join the advisory committee to the President of the Commission of the European Community on monetary co-operation or monetary integration, because up until 1992, that will be the prime item on the agenda.
I am concerned about whether the House will be able to address these issues effectively over the period up until 1992. If we approve the Bill, we shall, under article 3 of the decision of the Council on 24 June this year, in Luxembourg, be approving the total amount of own resources assigned to the Community for the period from 1988 to 1992. The percentages of GNP are specific. In 1988, it will not be more than 1·15, in 1989 1·17, in 1990 1·18, in 1991 1·19 and in 1992 1·2. What will be left for the House to determine or decide if we decide on Third Reading that that is what the Community budget will be? If we are publicising in advance that the Community budget will be of that order, what accountability to the House of Commons will there be, and how will it scrutinise the use of those funds, without the proposals that we are making in our new clause?

Mr. Spearing: My hon. Friend has posed a question—I do not know whether it is meant to be rhetorical or actual. My understanding is that the figure that he quotes, and hence the importance of the formula and of the committee to which he referred, is a maximum envelope, and that it will be used as a maximum precept when the so-called 1·4 per cent. of VAT will not supply the amount. This supplies the deficit. Surely, the control will be in an annual regulation passed by the Council of Ministers, which may determine a precept less than that amount. An amendment has been tabled to new clause 4 which I hope that he can support. I hope that the Treasury can do so also, because it is, I should have thought, in line with its philosophy. At that point, the House controls what Ministers do in Brussels, which determines whether that limit is kept to, or rather the degree to which it is determined inside the topmost limit, to which my hon. Friend has referred. I apologise for the apparent complexity of this, but it illustrates the extreme complexity of financial matters in relation to the EEC budget.

Mr. Holland: I am grateful to my hon. Friend for making those useful points. These are the maximum levels of expenditure beyond which one cannot go. But these are phrases that we have heard before. We have seen them overrun, as we did with the Fontainebleau agreement, which ended up being hardly worth the paper on which it was written. We need to know, if a Council regulation is to be made available to us, in what way it will be put before the House for the assessment and the approval of the House. Otherwise, we shall lose transparency and accountability.
I am not one of those who feel that this country has an unadulterated sovereignty which has been untarnished by any international agreement and would be sullied only by agreement with other member countries in the European Community. There is a strong case for effective joint action at the European level on a range of problems which at the moment the Community is hardly addressing. It has been stuck in the mud of the common agricultural policy and has not been able to address major environmental issues, and it should do so. We should seek a net transfer of funds between regions and sectors of the Community, because the competitive process itself equalises opportunities only in form, and not in reality, whether that is between rich and poor regions or between big and small companies.
I should be glad of a reply from the Postmaster General on this, so that the issue of monetary co-operation—I beg the right hon. Gentleman's pardon. I retract that. I am aware that he does far more than post to hon. Members briefs from the Treasury Bench. He is, of course, the Paymaster General. I should be grateful if the Paymaster General will tell us how the Government expect that the House will be able to address the issues raised by European monetary co-operation.
There may be less terror in this than at first appears. For instance, the proposals for monetary co-operation are not part of the Single European Act, but a committee established by the President of the Commission will report on those matters which directly concern the Treasury in a range of ways. There may be less terror in the sense that, just as the achievement of a common internal market will not be the springboard to a federal Europe, nor need monetary co-operation be some kind of sabre-toothed tiger which is about to shred the nation state. We do not need to react in emotive terms to the proposals that have been made.
The observations made on this by Jacques Delors, as President of the Commission, have been very useful. I wish to mention a couple of them because they refer to a European monetary fund which could involve expenditure either from the allocation before us and the Community fund, or other alternative forms of allocation. When it was put to Mr. Delors in an interview in Le Monde on 20 July this year—I summarise rather than give a detailed translation—"Well, Mr. Delors, as President of the Commission, you are presumably in favour of a European currency and a European central bank", he replied, "What do you mean by a European currency? Do you mean a European monetary fund, a European reserve currency, a parallel currency to the national currencies or, as some people think, but which is certainly not for now, the abolition of national currencies and the substitution of a Community currency? Do you mean, in effect, a pragmatic move such as a build-up of the ecu as a reserve currency and for use in other international relations?" Mr. Delors also asked what would be the relation between that and economic union and what would be the institutional implications of advancing towards closer European monetary co-operation up to 1992.
Opposition Members would like to know from the Paymaster General precisely how the Government will approach those matters and how the House will be able to address them. Will we find, as in so many other matters before the House, that an intergovernmental decision is taken at a European Council meeting which, months later, is brought to this Chamber for approval? We appreciate


that Governments have to take decisions internationally, but that should be done on guidelines that have been debated in the House. The House does not wish to be taken by surprise by decisions which have been snatched at the 11 th hour and the 59th minute or by stopping the clock, whether in Luxembourg, Strasbourg or Brussels, on such important matters as monetary co-operation or monetary integration.
In that respect, we certainly trust that the Paymaster General will do better next time and that, instead of having apologies for unclear decisions which will not even be published and put before the House, we will have clarity, transparency and a chance for the House to express its view and voice.

Mr. Higgins: The atmosphere in these debates has varied considerably over the years. Some hon. Members are still fundamentally opposed to British membership of the EC and others are perhaps too uncritically in favour of it. Between those two extremes are those of us who take the view that our membership is, on balance, beneficial, but it is important that we should continue to scrutinise the way in which the Community develops.
One of the problems is that some power has undoubtedly been transferred from the House to the EC, in its various manifestations, so it is all the more important that we should continue to ensure that all the ways in which that power is in danger of being transferred perhaps too fast or to too great an extent are scrutinised as well as possible. That requires not only much hard work, but also some stamina, because otherwise there is some danger of a feeling of despair that we go on through a series of ritualistic debates without managing to convince the Government of the importance of their own scrutiny being as great as possible.
The Scrutiny Committee, chaired by the hon. Member for Newham, South (Mr. Spearing) and the Treasury and Civil Service Committee, of which I am Chairman, have spent a great deal of time, and continue to do so, on these matters, as do other Committees of the House, but there is now such a plethora of documentation from the EC that we must seriously consider whether the facilities that we have are adequate to deal with that. Much of it may be settled in the course of time and the flood of paperwork, directives and regulations will diminish, but, for the immediate future, we should be on our guard against the sheer weight of documentation and action, particularly leading up to 1992. Given the size of the Civil Service at the centre, it is seriously open to question whether there are the resources to ensure that many absurditites do not creep through simply because we do not have the time and resources to deal with them at the speed with which they are being put forward.
This evening, we come again to what is undoubtedly a tremendously important piece of legislation reminiscent of various occasions in the past when we have increased the Community's resources in exchange for various undertakings about effective budgetary discipline, more effective budgetary discipline and legally enforceable budgetary discipline. As we are in Committee, I wish to put some specific questions to my right hon. Friend the Paymaster General who, as always, is very assiduous and knowledgeable about these matters.
I wish to take up first a point which arose earlier with regard to the provision of overdraft agreements and overdraft facilities to the Community. A number of hon.
Members were worried because the Minister said that the overdraft arrangements would be effectively obligatory for the United Kingdom, provided they did not exceed the budget for that year, but he did not make it clear whether that was the situation. Many of us believe that the provisions in this piece of legislation, which extend the limits, would be necessary to justify the budgetary arrangements. If that is so, it is outside the legal framework to which he referred, so I hope that he will begin by clarifying that point.
It is in many ways unfortunate that new subparagraphs (e) and (f) do not appear as separate clauses because two very different principles are undoubtedly involved in them—the increase in own resources and the intergovernmental agreement. We debated the intergovernmental agreement at some length earlier, but I want to refer my right hon. Friend to one or two points.
I should stress that the agreement states that it will be an amount
to balance the 1988 budget an amount which will not exceed
a certain sum to which I shall refer in a moment. It has been suggested that the need for the agreement has passed because of changes in the financial situation but, none the less, the Government will now go along with it and the money will be spent on something else simply because the budget will be unbalanced again, although we have the sums available to balance it, if they are needed.
I am not sure whether I expressed that clearly. Let me try again. We originally had an amount which was to be provided by the member states to balance the 1988 budget. It is suggested that, since that negotiation, there have been further changes in the revenue and expenditure of the Community so that the full amount was not needed, but, none the less, it appears that we are still going to provide up to that full amount. Perhaps my right hon. Friend the Paymaster General will clarify the position.
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We are told that the amount in question will not exceed 7,113,737,522 ecu, and I should like to know how that remarkably unround sum was arrived at. I should have thought that a reasonably round sum would have been picked. What was the basis of the calculation? How was it changed by events that took place after 11 and 13 February? The situation cannot have remained the same, so it is rather extraordinary that the amount needed is still 7,113,737,522 ecu.
I was rather worried when my right hon. Friend the Paymaster General said earlier that that sum is the total due. As I understand it, it is not. That is the maximum sum that we may eventually be called upon to pay. Perhaps my right hon. Friend will explain what is now needed.
We know that basically the provisions in the Bill arise from profligate expenditure on agriculture. The United States has suffered a most appalling drought this summer and a great fall in the amount of grain harvested. Surely this is an ideal opportunity to dispose of the grain mountain and to recoup some of the huge sums that we have been spending on storage. This is a factor that should have affected the sum to which I have already referred Is that the position or it is not?
Much of the provision in the IGA is concerned with a special arrangement for agriculture. The EAGGF guarantee section is affected by the appreciation of the dollar, and I ask a question which I have asked before and


to which I have never received an answer. Why should farming be the only industry that is protected against changes in the exchange rate? This protection is not offered to any other sector. Why should we be authorising the Government to go along with an EC proposal that does that? I do not understand why farming should be protected from exchange rate fluctuations when we do not find it necessary to provide that protection anywhere else.
Is the agreement legally binding? There have been many discussions on the issue and we all know that the Fontainebleau agreement, as the Select Committee on the Treasury and Civil Service observed at the time, will not work. I think that my right hon. Friend the Prime Minister has recognised now that the agreement was a mistake. That being so, is the present agreement legally enforceable? We are incorporating in the Bill the decisions of 7 and 20 May and 24 June, and the IGA, but are we incorporating anything that is legally binding?
In an earlier debate my right hon. Friend the Paymaster General said, in effect, "Don't worry. That is all incorporated in various EC regulations, directives and so on, which will be legally binding." But we know that a huge part of the EC budget is not covered. If the agreement is legally enforceable, by whom is it enforceable? We know from our debates on the Court of Auditors that many operations have been carried out within the EC which the court has said were illegal.
We have gone along with certain VAT adjustments, for example, because we have been bound by the relevant provisions. We have considered ourselves obliged to do so because the European Court has said that we must, but the Government have not pursued the legal sanctions that appear to be available from the reports of the Court of Auditors. If the arrangements are to some extent legally enforceable, by whom are they enforceable? Given the history of Court of Auditors? reports, can we rely on the Government to enforce them?

Mr. Spearing: As the right hon. Gentleman has said, the Select Committee on the Treasury and Civil Service drew attention to the flaw in the Fontainebleau agreement. The Scrutiny Committee, which I have the honour to chair, said that the provisions that we are considering are not treaty-binding. What is the stage that we have reached with the current proposals? It is true that the stabiliser mechanism is legally enforceable, perhaps by the Court of the European Communities, in accordance with the formula laid down therein.
Even if the provisions are enforced, will spending on agriculture be reduced to a level that is beneath the ceilings that are shown in the decision? That is the play on words, and the Government and the Community have not answered the question. Apart from legal enforceability, will expenditure be reduced? Will it be reduced to a sum smaller than that which appears in the documentation? The answer that I have so far is that we do not know.

Mr. Higgins: We are now told that expenditure on agriculture should be steady instead of being a falling proportion of gross national product. I take the hon. Gentleman's point.
It is understandable that Ministers are under great pressure when they engage in negotiations within the EEC. They are frequently heavily outnumbered and they often

have to return to the charge time and time again. They eventually do a deal, and they convince themselves that it is the best one that is available, but that may not be so. It may be that they should have continued to say no for longer. In my view, that is the position with the Bill.
It is curious that the agreement has cleared the way for other discussions on 1992 and the other ways in which the Community is to develop. This has raised a number of difficult questions. We were told on Second Reading that the legally binding agreement would apply to obligatory expenditure. We were told also that it could not apply to non-obligatory expenditure, because that would infringe the rights of various Community institutions, including especially the European Parliament.
It is reasonable to ask whether the Bill implements the amendment of the treaties, and my understanding is that it does. It would seem that it is not honest to argue that we could not get a legally binding agreement on non-obligatory expenditure because that would require amendment of the treaties. We need to be clear why it is that we did not go for what we were originally told we would get, which was a legally binding agreement which covered all Community expenditure. We are told that that is no longer obtainable.
I hope that we shall hear satisfactory answers to these questions from my right hon. Friend the Paymaster General. We recognise the basic problems that he faces in all the negotiations and the assiduous way in which he has sought to get the best deal that he can. The scrutiny of these matters is ever more important and I hope that we can continue effectively to scrutinise in this place.

Ms. Mildred Gordon: The new fourth resource is to be based on shares in the gross national product, and the method of measuring GNP is likely to be on traditional lines that do not take into account the vast input of work outside the formal monetary economy that is to be found in every country. The traditional system of national income accounting measures GNP as the sum of income that is created by individuals in a particular country. It is largely a measure of activities that result in monetary transactions. That does not take account of unpaid work that is undertaken by women. Relevant examples are home-makers, mothers bearing and bringing up children, women caring for sick and/or aged people and farmers' wives in rural areas. The examples are manifold. All this work would be included in aggregated national accounts if it were performed by paid workers. Thus the income received by paid nannies, au pairs, child minders and agricultural workers would be included as part of the national income.
The United Nations has done a great deal of work to show how inappropriate are such distinctions in measuring GNP. In 1980 at a conference in Nairobi at the end of the United Nations decade for women, a United Nations document "Forward-Looking Strategies for the Advancement of Women to the Year 2000" was passed by representatives of the assembled Governments and was ratified later that year by the United Nations General Council in New York.
Paragraph 120 of the UN document reads:
The remunerated and, in particular, the unremunerated contributions of women to all aspects and sectors of development should be recognised, and appropriate efforts should be made to measure and reflect these contributions in national accounts and economic statistics and in the gross


national product. Concrete steps should be taken to quantify the unremunerated contribution of women to agriculture, food production, reproduction and household activities.
In Germany there are many small agricultural holdings whose labour force is confined to unpaid family workers, most of whom are women. Considerable efforts are being made there to quantify their economic contributions. In rural Britain that unremunerated contribution includes tending the household plot, and caring for domestic animals. Unpaid women are small-scale growers, traders, vendors and sellers of handicrafts. They also keep the books. All that time-consuming, back-breaking work is left out of the GNP and thus cannot be convered by economic planning, programming and social welfare services. Women are the forgotten producers and providers of services.
When making comparisons for the purposes of GNP, the unpaid work of women in urban areas has an equally important bearing. Attempts are being made in Holland to assess the effects of including housework and other unwaged activities in the various economic aggregates. That is possible because a comprehensive family budget and time-use survey is carried out in Holland. The United Kingdom has a family expenditure survey, which considers income and expenditure, but does not consider time usage, and no attempt is made to quantify unpaid activities. Women's unpaid work is not counted, but it is certainly counted upon. The Government's initiatives to de-institutionalise health and welfare services and subsequent cuts in paid employment have increased the unwaged work load enormously.
Jacques Delors will chair a committee which will attempt to work out a uniform formula for calculating GNP. The committee should take steps to quantify and count the work of women in GNP, and that can be achieved on a European basis within the Community. It is also important that the United Kingdom Government initiate research into evaluating women's work. Only when the unpaid work of women is included will we see what is really happening in the economy in the United Kingdom and in Europe and make the proper assessment of GNP and the changes necessary to pursue justice for women.

Mr. Marlow: In deference to a long-dead relative of mine who was Archbishop of Canterbury once, and for no other reason, I would like to start with a text if that is all right. The schedule which the hon. Member for Newham, South (Mr. Spearing) wishes to add to the Bill entitled:
Decision of the Council of the European Communities on the System of the Communities' Own Resources
which was agreed at Luxembourg on 24 June this year states:
Whereas the resources available within the limit of 1·4 per cent. are no longer sufficient to cover the estimates of Community expenditure; 
There are all sorts of whereases and whereats before the thing starts. The decision is based on the evidence that the 1·4 per cent. limit is no longer enough. That is not the case. That is history. That is water under the bridge. As I am sure all hon. Members will be pleased to hear, we have had a European success. Either through luck or judgment the Community is now awash with funds. It is solvent. It has got the money. It is not short of cash any more.
The Community is not now about the last penny or about cash. If I can share common ground with the hon. Member for Vauxhall (Mr. Holland)—I am sorry he is not in the Chamber at the moment—the Community is now

about willing and active co-operation between independent sovereign states. It is not about cash any more. It is not about filthy lucre. The clause that we are debating at the moment is purely about money.
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The pre-Bruges pre-solvency clause seeks to increase the resources available to the Community by £1 for every £4 that is available at the moment. It is not necessary. They do not need it. It also seeks in its second part to provide a loan—an intergovernmental agreement I think is the code word for it—for a debt that does not exist. We are coughing up cash before it is necessary. We are making commitments before we need to.
In the previous debate we had a long discussion about financial discipline. I appreciate that we are all desperately concerned about financial discipline in the Community. We have not got it right yet. When the Bill was brought before the House the new mechanism for dealing with financial disciplines had not been decided. Apparently it has been decided now. Sadly, it is not in the Bill. It has been decided.

Mr. Brooke: I want simply to clarify what my hon. Friend has said because I do not want either of us to mislead the House. When the Council agreed the new own resources decision on 24 June, the various stabilizers—the legal instruments to which I referred in my exchange with my right hon. Friend the Member for Worthing (Mr. Higgins)—had all been concluded. When the Council met on 24 June, it was with the full package in being. The full package necessarily was not in being in Brussels in February.

Mr. Marlow: I am grateful to my right hon. Friend. That is very helpful. However, we have had packages before and they have not worked. We now have a new package and hopefully that new package is going to be effective and successful where others have not been so, but we do not know. We cannot take it on trust.
There was a time, when this Bill was first put forward, when it was essential to the Community or the Community felt that it was essential, that this agreement was reached and that the Bill was on the statute book. It is not essential now. As it is no longer essential, why do we not wait and see how the financial discipline works before we assent to the Bill and make it an Act of Parliament?
We all understand the Government's position. They go to negotiate, come to agreement and have to use their best endeavours to achieve what they first set out to achieve even though the circumstances might well have changed. It is therefore proper that the Government put this measure before the Committee. It is unimaginable that they would not because they are expected to by their Community partners. They cannot avoid it.
Opposition Members may say that the Government could have done better. I am a modest man and I do not believe that I could have done better. I do not believe that my right hon. Friend the Member for Worthing (Mr. Higgins), who is a great expert on this subject, could have done any better. I am sure that in various ways there are many modest people on the Opposition Benches and I am certain that they would not have done any better. The Luxembourg agreement in the Bill is probably the best that any Government could have got at the time. Having got that agreement, the Government must bring it forward. They are bound to bring it forward.
That is the Government, but we are not the Government—we are Parliament. We are all members of political parties and we all accept that unless we are members of political parties, we probably would not get elected to this place. However, we have been elected to this place and we are all individual members of Parliament. The sovereignty of Parliament is entrusted to us. Although the Government have got to come forward with this Bill, it does not mean to say that we have to accept it and agree to it. It may well be that we should do the other thing. It may well be that in the interests of parliamentary control and democracy we should oppose it, and it may also be in the interests of the United Kingdom that we should oppose this clause.
What are we being asked to do? We are being asked first to provide a chunk of cash, an RGA, which is no longer necessary. We are being asked, secondly, to surrender control for ever—in perpetuity—of an additional amount of money to the Community's resources: an amount of money which, mercifully and thankfully, the Community does not need. We are going to surrender that money to Community institutions—when, as my right hon. Friend has said, there is no proper democratic control over those Community institutions.
Some people will say, "Give it to the European Parliament," or "Give it to the Commission." There are problems in that because, as we all know, whatever their good intentions may be, the European Parliament's and the European Commission's overall objective, whatever else they are doing, is a federal united states of Europe. So every decision that they are going to make is not on the basis of whether that money is being spent wisely or correctly but whether that money is leading towards a European federation, so they cannot be trusted. So we are handing over vast sums of the taxpayers' money; I have heard £1·5 billion being mentioned. We are quite rightly concerned at the moment about the balance of trade deficit. That £1,500 million is a very significant figure of cash. That is not trade, that is cash. We are not getting goods for it, and it is going out of this country if we agree to this clause.
I would like my right hon. Friend the Minister, when he makes his reply, to answer a group of questions. What would happen if we did not agree to the clause? What would happen if the Bill fell? The money is not needed now. What would happen if the Bill were to be delayed? The Government can always bring it back at a later date. The Government are in a very powerful position. They have a massive majority. Those on the Government Benches who oppose the Bill realise that there are not enough of them to change the Government's mind. What would happen if we threw the clause out and threw the Bill out?
I understand that a few colleagues have personal ambitions. They have had a little piece of paper from the Whips' Office saying that they are expected to support the Government this evening. They are concerned that if they do not do that, their futures, their careers, might in some respects be jeopardised. I am pleased to see that we have a Whip on the Front Bench at the moment. A Whip knows, as we all know, that, as I said before, we are in a new situation. The Community does not need the cash. The Prime Minister has made a stirring speech about

active and willing co-operation between independent sovereign states. It does not say anything about cash. Active and willing co-operation does not need cash. We do not need the Bill any more.
I am sure that my hon. Friend the Member for Penrith and the Border (Mr. Maclean) will tell the Committee whether any of my other hon. Friends' careers will be put in jeopardy this evening if they oppose this measure. I am sure that he will go to the Dispatch Box now and tell my hon. Friends. No, obviously. It is line with the Bruges speech. It is line with the Prime Minister's policy. Any of my hon. Friends who want to vote against this clause this evening are perfectly entitled to do so. Their careers will not be in hock at all. After Bruges, I would have thought that their careers might be even more secure than they have been.
I put to my right hon. Friend the Minister the subject of European financial control. Why do we not wait until we have just a little bit of evidence that this new formula for financial control is actually successful and operates properly? Why do we not wait? They do not need the money now. When we have that evidence—if we have that evidence—and if the Government then bring this Bill before the House, I promise my right hon. Friend—and I expect that my hon. Friends will promise him—that we shall do everything that we can to pass the Bill just as quickly as he wishes it to be done. Why do we not wait for that evidence? We do not need the Bill today, do we?
Another question that I wish to ask my right hon. Friend concerns Britain within Europe. Does it matter if we do not pass the Bill now? We are good Europeans. We believe, as the Prime Minister believes, and as the hon. Member for Vauxhall (Mr. Holland) believes, in willing and active co-operation between independent sovereign states. We do not need the Bill to produce that. What is the implication for Britain in Europe? I would have thought that it would be totally positive, totally in line with what the Prime Minister is trying to secure at the moment.
A final question for my right hon. Friend. If we do not pass the Bill today, what will be the effect on the United Kingdom taxpayer? We pay for the Community in two ways. We pay a net contribution, which is something for which we get nothing. It is our membership fee. If we did not pass the Bill, what would happen to our membership fee? Would it be higher or lower than it is under the existing pre-Bill situation? Also, we have a gross contribution. I like to look upon gross contribution as what we pay for that clutch of policies provided by the Community.
We are suggesting that we should increase our payment for that clutch of policies by one quarter. We are not going to increase Health Service expenditure, education expenditure, child benefit or defence expenditure by one quarter. But for the same clutch of policies within the Community, we are being asked to increase it by one quarter. If we do not agree to the Bill, what will be the effect on the gross contribution that our taxpayers would have to make for what they get from the Community? I feel that it would be significantly lower. I would like to hear the figures from my right hon. Friend.
This is a parliamentary matter. Governments come and Governments go. I believe that this Government will be around for a long time. But it is a parliamentary matter, and it is to do with the sovereignty of this House; to do with the control over taxpayers' money that this House still has at the moment. I hope and believe that many right


hon. and hon. Members will oppose this new clause, so that we can retain a vestige of parliamentary dignity and control over affairs within the Community.

Sir Russell Johnston: I do not agree with the hon. Member for Northampton, North (Mr. Marlow) in his espousal of the mythical concept of sovereignty. Certainly his idea of what one should do with sovereignty and my idea of what one should do with it are very different and do not easily meld.
It is worth doing something that has not yet been done, which is to read into the record paragraph 7 of the explanatory and financial memoradum of the Bill, which in only five lines sums up what the Bill is about. It states:
Clause 1 provides that both the new Own Resources Decision and the IGA shall be added to the list of Community treaties in section 1(2) of the European Communities Act 1972, allowing payments under both instruments to be charged directly on the Consolidated Fund under section 2(3) of that Act.
That is very simple and straightforward, and very necessary. It should not have produced all the sound and fury that we have heard.
When we debated the Bill's Second Reading on 11 July, I said:
I welcome the Bill. It represents an important step forward in the slow but steady integration of the European Community and the development of stable financial arrangements within it. It is very much in line with the views that I and other of my right hon. and hon. Friends have expressed from this Bench over many years.
Later, I said:
Looking back to the successful Brussels summit in February, the fact is that, when faced with the choice of either jeopardising the achievement of the common internal market or agreeing to a modest and sensible increase in the Community's own resources, the Prime Minister chose the latter."—[Official Report, 11 July 1988; Vol. 137, c. 62.]
I see no reason to alter anything that I said then.
I refer now to three questions that are integral to the Bill. First, there is the Bill's context. In particular, there is the context of the Brussels Council, which for the first time —and this as has already been said by several right hon. and hon. Members, did not take place at Fontainebleau —set an absolute limit to agricultural expenditure for I988 of 27·5 billion ecu; in other words, £18,425 million. It provided that thereafter it should grow at no more than 74 per cent. of the rate of growth of Community GNP. That represented a considerable step forward in achieving a degree of budgetary discipline, particularly in this uncontrolled section, and the Government deserve some credit for what they did.
Secondly, the sums agreed in the IGA were fixed in proportion to GNP. That is an argument that I have made from this Bench for most of the past decade, and therefore it is something we much welcome. As everybody keeps going on about how much the British give, it is worth noting, because no one else has yet done so, what level of contributions are being required from each country according to that agreement. The largest contributor is the Federal Republic of Germany, with a contribution of £1,163 million. The second largest is France, with £967 million. The third largest is not the United Kingdom but Italy, with £923 million. The fourth largest is the United Kingdom with £741 million. Judging by how some hon. Members talk, it might be thought that we were carrying the whole weight on our shoulders, like Atlas or Colossus or whoever it was.
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Thirdly, the decision to double structural funds is enormously encouraging. What is most regrettable is the way in which the United Kindom, which should have been in the van in putting this argument, was for most of the time arguing against it. In my view it is an essential element of success within the Community. The trouble is that in the United Kingdom the whole argument about regional funds, and to some degree the social fund, has become mixed up with the Government's ideas of the minimalist state. If there is to be a regional fund, it must operate through some form of Government agency. Yet there are contradictions all the time. At the end of last week, the Government increased notably the funds available to the Scottish Development Agency, a Government agency engaged in regional development. There is not a great deal of consistency.
While we are on the subject of consistency it is perhaps appropriate to refer briefly to Bruges, and the seeming lack of consistency between the Prime Minister's position as set out there and the consequences of the Single European Act —to which she has already acceded and encouraged the House to accede—not to mention the very enlightened British paper presented at Fontainebleau. That paper has seldom seen the air, although I believe that it moulders in the Library. I recommend it to any hon. Member as a good sound indication of the kind of policy that the United Kingdom should follow.
Canute has always been given a bad press. It is forgotten that he did not try to stem the tide, but demonstrated to his sycophantic courtiers that he could not do so. The Prime Minister seems determined to prove Canute wrong, but it is she, I think, who is wrong. She is setting herself against the inevitable movement of history, and against the best interests of the people of the United Kingdom.

Mr. Marlow: rose—

Sir Russell Johnston: I am always only too delighted to give way to the hon. Gentleman, whose brief interventions I welcome greatly.

Mr. Marlow: I am grateful to the hon. Gentleman for his courtesy and dignity in giving way to me.
The hon. Gentleman is talking about the inevitable movement of history. Would he just look a little further into Europe—he is a keen European—at east Europe, and see what is happening in the Soviet Union, where all the central control is now being discovered to be a mistake and more power is being disseminated to the nations?

Sir Russell Johnston: Some of the remarks that I have to make are directed very much towards the hon. Gentleman's question. I agree with him, but what he has said does not contradict what I have to say.
The word "federal" has bounced lazily around the Chamber during our debate. For some—I suspect that they include the hon. Gentleman—it is an abhorrent concept, a nasty word, part of the bad vocabulary of politics that the hon. Gentleman does not like. I have never understood why that is, but then I must admit that the hon. Gentleman has said many things from time to time that I have found it difficult to understand. That may be a shortcoming on my part.
The hon. Member for Vauxhall (Mr. Holland) asked how the weaker parts of the Community could defend


their economic interests. How, for that matter, can that be done within the existing nation state? There are only two answers to the question that we know of, and it is a very good question. The fear felt by everyone—not only those who are in favour of the European Community, but certainly those who are concerned about its centrifugal forces—is that everything will be drawn into some great centre from the Ruhr to Paris to London. What are the answers?
As I have said, there are two answers. First, there is a federal structure that acts against centralisation by creating a number of alternative power centres. Why does the Federal Republic of Germany not suffer as Britain and France do from that great overweening centre? An important reason is the way in which the länder structure spreads power and influence throughout the country.

Mr. Cash: rose—

Sir Russell Johnston: If the hon. Gentleman will permit me to make my second point, I shall then give way. Indeed, this may relate to what the hon. Gentleman is about to ask.
The second answer is an effective regional policy pursued from the centre—whether that centre be London, as in the case of the United Kingdom, or Brussels, as in the case of the European Community.

Mr. Cash: First, does the hon. Gentleman agree—as I am sure that he will—that the most important question that we must ask about a federal structure is, which powers are being spread and diversified? Secondly, there is no doubt that the Länder have become increasingly concerned about what has been going on in their own country. Furthermore, they have only recently had a first-rate constitutional crisis over the very question of the relations between the federal Government on the one hand, the länder on the other, and the European Community. The question has arisen: what is a member state in that context? That gave rise to some further serious questions that have just been before the federal court. I think that the hon. Gentleman may have got his facts wrong.

Sir Russell Johnston: I do not see how the hon. Gentleman can end up by saying that I have got my facts wrong.

Mr. Cash: He has got his law wrong, then.

Sir Russell Johnston: Or my law, for that matter. I entirely agree that in the examination of any federal structure the important question is which powers should be divided and which should be entrenched. But it is equally true that within federal systems there is a perpetual tension between the central authority and the state—whether we are talking about the Bundesrat to which the hon. Gentleman has referred, or Canada or the United States. There is always tension; there are always periodic crises. There is nothing wrong with crises in politics: they are part of the tension of argument and the pull towards the centre and away. But at least the federal system has a structure that acts as an effective barrier preventing the centre from pulling everything in. In our case that does not really exist.

Mr. Cash: It does exist, in the precise form of the debate that we are now conducting. The very fact that that

centrifugal force is to be found in the various national parliaments maintaining the balance of power between themselves and the centre is at the heart of our debate.

Sir Russell Johnston: I do not think that that is very effective. I think that the reality outside the Chamber—which, as in almost all European debates, is sadly not overpopulated—is that things go on and it does not make all that much difference. I do not say that with any great pleasure, but I think it is a fact. I am jumping ahead of myself a bit, but let me say that I would much rather see the existence of effective, entrenched power centres in Scotland, Wales and the regions of England than trust this place to protect them against strong, centralising government.
Let me conclude by making two summing-up points. First, there is no doubt that the European Community has a wide agenda—social, environmental and economic—in which only supranational action, democratically supervised, can be effective and can allow transparent decision making. The hon. Member for Vauxhall referred to the Cecchini report, which again I recommend to hon. Members, although it is a bit dense—I use the word in its proper sense. The argumentation is heavy and closely interrelated.
As the hon. Member for Vauxhall said, the report forecasts a considerable dynamic increase in output following completion of the internal market. Whether or not one can be sure of that, of course, is another big question, but he is right to say it. When I interrupted him and said that there was something to be said for the original European Common Market from 1957 until the 1960s, he said that that was all very well. The Germans certainly benefited, but not so much the republic of France or the republic of Italy. They had to devalue and they did not do as well.
That is one of the things that in these days of artificial sensitivities we sometimes hesitate to say. Certain people are especially good at working. The Germans happen to be people who are especially good at working. They are assiduous, hard-working, competent and in many respects innovative. Perhaps, too, they are more disciplined and organised than some other countries have tended historically to be, if I may put that as gently as I can. However, the hon. Member for Vauxhall did not go on to say that neither France nor Italy made any attempt to leave the European Community because of that experience. On the contrary, they made the necessary adjustments that they felt were needed, and they derived benefit.
Before I leave that point, may I say in brackets—I do not think I have had the opportunity to say this to the House—that I believe that Lord Cockfield was badly treated in being sacked from his position for showing what was no more than diligence, activity and energy. That was unfortunate.

Mr. Foulkes: Does the hon. Gentleman equally agree that the work undertaken during the past four years by Stanley Clinton Davis as the other Commissioner was also not properly recognised in the summary way that he, too, was kicked out? Notwithstanding the fact that he has been replaced by one of my excellent colleagues, being kicked out in a such a way was certainly no recognition of the excellent work that he has done for the past four years.

Sir Russell Johnston: Certainly, Stanley Clinton Davis developed considerably towards the latter end of his period—[Laughter.]

Mr. Foulkes: Most ungenerous.

Sir Russell Johnston: On the contrary, I think that was very generous.
In addition, I believe that our former Member, Bruce Millan, will be a very good Commissioner and is a good choice.
To return to the question of supranational action, it is not just Jacques Delors and Helmut Kohl and the Italian Prime Minister who talk about the need for a social Europe: it is practically everybody bar our own Prime Minister. The idea that somehow we can achieve a politically acceptable internal market without considerable social and political protection is a mirage. I do not understand why the Prime Minister should continue to propagate it.

Mr. Spearing: The hon. Gentleman is speaking on an important point, but does he not agree that whatever agreement there may be for what he calls the social dimension, or whatever its merits, it was not part of the Cockfield package? For the hon. Gentleman and his party or anyone else now to suggest that without this dimension there is something wrong is surely inconsistent with an acceptance of the Cockfield package without it. Will the hon. Gentleman comment on that?

Sir Russell Johnston: I never accepted the Cockfield package without the social dimension. We have always said that, for the Cockfield package to be politically acceptable, it requires to have the social element of which I have just spoken. Unfortunately, we are not in a position to dictate these matters—any more than the hon. Member for Newham, South (Mr. Spearing) is. I have some confidence—the record thus far supports my confidence—that the other members of the European Community will drag our country slowly, reluctantly but inevitably in a social direction, for which I will be grateful.
I return to the question of federalism, because various Members asked what federalism was. I suppose that it is essentially a question of fitting function to geography and community. It is not something to fear, but to welcome and to utilise. Again, there is contradiction in the Prime Minister's position. If one talks to her about devolution of power to Scotland, Wales or the regions of England, she is against it. She does not want power to go down. If one talks to her about her power going up, she does not want it to go up either.

Mr. Foulkes: She wants it all for herself.

Sir Russell Johnston: That rests on the assumption that the status quo is perfect and is the most appropriate structure of government. I do not believe that at all. I believe that it will change because function, power and community are mismatched. The hon. Member for Northampton, North (Mr. Marlow) was quite right to say that what is essential is that, at the same time as we accept that there are certain economic, environmental and political activities that we can only undertake effectively in conjunction with others, we must realise that that is not an argument for centralisation at all, but an argument for effective entrenched devolution—which means federalism.
I believe that the Bill is a small step on the way. It shows the Government's confidence in the future of the European Community, and in that regard I welcome it.

Mr. Curry: I believe that the theme that has underscored this debate has been that of sovereignty. Quite rightly, it has been more a theme of parliamentary sovereignty than national sovereignty. It is legitimate to draw a distinction between those two. I have always held the view that Governments in the Community have a sort of compact in which they pursue goals which they determine to be in the national interest in return for the pooling of some of their sovereign responsibilities.
In the Community we have a central authority or a Community authority which is facing a fragmented parliamentary authority. I have spent nearly 10 years in the European Parliament and I must say honestly to all my colleagues that I do not think that either Parliament is effectively scrutinising Community legislation. The European Parliament lives to some extent on the aspiration that it may be able to, and occasionally in the House there is some recollection of what it wishes it were able to do. I believe that between the two there is a deficit in sovereignty.
There is a deficit especially in that great mass of secondary and delegated legislation which takes place in Brussels. There is a misunderstanding of what Eurocrats are. The Eurocrats are likely to be national civil servants on a day trip from Gatwick, because they are the people who pack many of the committees that deal with the secondary legislation. I suspect that the problem can only be solved if we recognise that it must be solved on the basis of burden-sharing between that Parliament elected to serve the Community purpose in the sense of monitoring Community institutions and that Parliament that is there to monitor the effects of national government.
When the House gives the impression that the European Parliament is part of a problem and not part of a solution, it does itself a disservice. I believe that there is room for both institutions. They are both indispensible if what we are really concerned about is not exclusively the future of any particular institution but the future of the interest, and that interest is the notion of democratic accountability.
My hon. Friend the Member for Holland with Boston (Sir R. Body) talked of the success of the Danish Parliament. I agree with the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) that the nature of the democratic process in Denmark has an important influence, because it has a system of proportional representation which is so tortuous that it has the effect of denying almost any Government a stable majority for any issue—not just for a European issue. If we in the House were to vote for proportional representation of that sort of complexity, we could no doubt deny our own executives that sort of authority. In my conversations here I do not detect that readiness to embark upon that particular venture.
My hon. Friend the Member for Northampton, North (Mr. Marlow), who informed me that he would be leaving, asked what would happen if we did not vote for this measure. The answer is that we would see the independent sovereign states coming into action. What would happen if five independent sovereign states—for example, the


French, the Germans, the Dutch, the Belgiums and somebody else—said that they would get together and create a central bank and a common currency, and do those things which they think are necessary? We forget that our membership can be a constraint upon as well as a spur to the action of others. If a central bank were formed by other countries, our politics would necessarily be governed by a need to respond to what those countries were doing.
The essential choice is not between membership and non-membership. It is not a choice between an autonomous line of action and one that is purely co-operative. It is a choice between participating in collective decision-making or necessarily finding that our major decisions are dictated by the fact that collective decisions have already been taken. For that reason it is important to recognise that the measure before us is not perfect. The guarantees cannot be absolute, but in terms of improvements and increments it is significantly better than what has gone before.
The history of our membership of the Community has been that we have galloped to catch up. Now we have reached the stage when we can look the other member states in the face and state that we have significantly recovered and improved upon the deficits that were once part of so much of our national life. Now we can participate fully and freely on the same terms as other member states.
Until I heard the previous few speeches, I felt that the debate had been somewhat unreal. Earlier the debate gave the impression that there is still unremitting hostility to our membership of the Community. I do not believe that is the case. I believe that there were significant changes in the summer; the most significant being the change of heart of the Labour party and of the national executive of the trade unions. I believe that those are positive developments. The debate is no longer about whether we should be members of the Community but about what should happen in Europe. When a certain amount of decision-making takes place under the umbrella of the Community it means that the national debate is transposed to the Community level.
It is right that we should argue about the role of the so-called social Europe. I must point out to the Treasury Bench and to the Opposition Front Bench that they have acted as by far the most successful publicity agents for which Jacques Delors could have hoped. Within the political spectrum described by Ministers and Opposition spokesmen, Mr. Delors has been painted in demonic terms. He is only chairman of a large county council and it is wrong to attribute to him all sorts of mystical powers.
It is right that we should discuss whether we want a social Europe and whether we want a Europe that is based on deregulation. It is right to discuss whether Europe should be run on Socialist or free enterprise principles. Europe has characteristics of both systems. The social and regional funds are interventionist and they will remain because of the political bargain at the heart of the Community between the northern states and the southern, less developed states, which perceive their means of advance through such funds and mechanisms. Those states stand to gain most from a deregulated system.

Mr. Cash: My hon. Friend is conducting himself in the sweetest and most reasonable manner. He is saying some

very important and interesting things, not least of which is that Mr. Delors is only in charge of something akin to a county council. I take grave issue with my hon. Friend about that. He should reflect carefully on what he has said because the powers of the Commission are so far removed from the powers of a county council that it is not true.

Mr. Curry: The Commission is not an absolute Government. It is not a Government in exile. Of course it has certain charactieristics of government, but the essential power in the Community at present is the Council of Ministers and the Governments. When a decision is reached in Cabinet it is one step removed from Parliament; when a decision is taken in the Council of Ministers it is two steps removed from Parliament.
The Commission operates largely through management committees and a whole host of sub-structures which are part of the decision-making process. The Governments are significantly represented. It is true that Mr. Delors has delegated responsibility and that, in certain areas, the Commission acts as the executive, for example regarding competition policy. The Commission has intervened of late to use that power and it can also intervene on matters of state aids. I do not deny that my description of the Commission as a county council was exaggerated but it was only exaggerated to draw a contrast with what I believe to be an equal exaggeration regarding the excessive supranational functions of the Commission.
The move towards 1992 is not part of the Brussels bargain, but the single European market would not have been possible if the stage had not been set there. I believe that the Community is profoundly deregulatory in character. The right hon. Member for Chesterfield (Mr. Benn) has argued that he dislikes the Community because he believes that Socialism cannot be established within it. In a sense he is right, because the treaty of Rome is framed in liberal market economy manner and the move to 1992 is a thrust in that direction. There is no reason why a social democratic Europe—a Scandinavian Europe—is not feasible. That is what the nature of the debate should be.

Mr. Spearing: I wholeheartedly agree that the treaty of Rome, as drafted, is a laissez-faire document and for that reason is not neutral as between nation states.
Whatever the hon. Gentleman may say, does he not agree that the Commission is extremely important because under the treaty of Rome it originates the legislation that it puts before the Council of Ministers? The Council of Ministers cannot usually act other than on a proposal from the Commission. Therefore the power of the Commission and in particular the power of the President, currently Mr. Delors, is great. The Commission and the President are the guardians of the gate through which legislation can emerge. In Britain we would not agree for one moment that civil servants could suggest the legislation to place before Ministers—indeed, Members of Parliament can do that. I believe that the role of the Commission and its President is more crucial than the hon. Gentleman has tried to suggest.

Mr. Curry: The hon. Member for Newham, South (Mr. Spearing) is correct that the Commission sets the agenda in the sense that it has the power to initiate legislation, but the Commission cannot pass that legislation into law. There are many stories within the Community of legislation that was proposed decades ago which has not yet got through the decision-making process and has not


reached the Council of Ministers for a final decision. Neither in this House nor in the European Parliament can Community legislation be originated.
Certainly the Commission has the potential to become a more powerful institution but at the moment the balance of power is effectively with the European Governments within the Community acting through the mechanism of the Council of Ministers. The hon. Member for Newham, South demonstrates how important it is that we should get some democratic accountability. That can he done only if it is seen as part of a burden-sharing operation between those people defending democratic interests. Such burden-sharing should not be seen as a competition between the various institutions.
The rendezvous in 1992 is deregulatory, as is the thrust of Brussels policy.

Dame Elaine Kellett Bowman: Does my hon. Friend believe that Mr. Delors' remarks are deregulatory in character?

Mr. Curry: If Mr. Delors had not pushed hard for the package that emerged at Brussels, it would have been much more difficult to get that package through. Mr. Delors was a Socialist Minister in a French Government and he would like to see a greater parallel between the Community social policy and the liberation of the market place. I believe that we shall realise the gains of 1992, in so far as we shall manage to emphasise deregulation. We shall not find ourselves trapped in precisely the same web of entangled social regulation that we have tried to escape on a national level.
Too much has been made of the social programme. When one studies it, it is a lukewarm manifesto. The social programme is part of the debate that is now taking place in Europe regarding the policies for which the Community should aim.
Reference has been made to the Community budget and the savings to be realised. It is true that this year there are limited savings largely because of external events. The whole Community budget depends largely on external events—the level of the dollar, the state of the world harvest, world crises and the Chicago board of trade. It will depend increasingly on whether Mr. Gorbachev manages to reform Soviet agriculture successfully. We have a vast vested interest in his failure because if he succeeds, the last major world market will disappear.
8.30 pm
We must also remember that in agriculture the debate has been transposed a step beyond the European level. It is now in GATT. Agriculture will now be subject to constraints imposed by the need for orderly world trading, just as until now its reforms have been the result of budgetary exigencies in the EC.
The Community has a record of poor housekeeping, but the Commission, with all its sins, cannot be accused of responsibility for the American drought, the problems of the Soviet and Chinese harvests or the level of the dollar. Given the pattern of Community policies and the fact that a great deal depends on member states being willing to put regulations into place and to implement policies, there is a necessary imprecision in Community budget-making. We must try to limit it, but if we do not recognise that, we do an injustice to our case.
Any key based on GNP is bound to be better for the United Kingdom than a key based on VAT, especially

when we have the 55 per cent. cut-off. The rebate which the United Kingdom has obtained and which we were told years ago we would never get because it was unpopular is enhanced under this document, unlike under the previous system, and it is taken outside the budget, which makes great good sense.
The present mechanisms have a much better chance of being effective than what has gone before. Until now, where they have been implemented, there has been a significant impact on prices. Those who doubt that need only accept my open invitation to come to my constituency, which consists of almost every possible form of agriculture, and listen to what the farmers are saying. Shortly the Council will have before it proposals to reform the sheepmeat and beef regimes and I trust that those who are anxious for continued agricultural reform will not baulk at these reforms on the grounds that they happen to be hitting their farmers rather than others' farmers. We must be consistent in what we do.
The measure is to be welcomed. The Government have brought us forward to a stage where we begin to see some consistency in the budget. The present savings are largely fortuitous. It would he wrong to take them from the capital account and put them into revenue or to assume that the savings would be permanent, just as it was wrong in the past always to apply for money the minute something appeared to be going wrong. The Commission is right to be cautious. Nevertheless, we are on target for a 4 billion ecu overestimation of expenditure next year.
This is a good and necessary measure. There is not an option to say no to it in practical terms because the choice is between taking part fully in Community decision-making, whether to promote or restrain spending, and allowing decisions to be taken only to find that the major parameters of political discussion are covered by decisions already taken by other people.

Mr. Spearing: It is a pleasure to follow the hon. Member for Skipton and Rippon (Mr. Curry). Although I disagree with him, perhaps fundamentally, on many of these issues, he at least has the ability and knowledge always to talk about them interestingly.
That illustrates one of the problems which confronts the House. We have an important international treaty and a Committee stage which involve the expenditure of about £5,000 million a year between now and 1992. Even with the help of eight permanent members of the House of Commons staff I find it increasingly difficult to have some sort of working knowledge, not just of the details but even of the major features of this sphere. I warn the House that we are fast reaching a stage where so few people will feel able to debate or understand this that scrutiny will be at risk—it already is—and power will go from us. However good our scrutiny, if details cannot be presented reasonably, we shall lose power. I challenge any hon. Member now to disagree with that. If hon. Members disagree, they should read the agenda or attend the Select Committee on European Legislation to see what it consists of.

Mr. Curry: indicated assent.

Mr. Spearing: I am glad to see the hon. Gentleman nodding assent.
My speech on clause 1 stand part is in two parts. The first relates to detailed matters of the articles of the


principal document before us, which is the so-called decision, and the second will be a few remarks on the post-Bruges scene.
Several hon. Members have mentioned discipline. I understand—I hope that the Paymaster General will correct me if I am wrong—that we have a binding mechanism for stabilisers which are written into the regulations. We also have an obligation to double the social and regional funds and to create what I call an EAGGF—European agricultural guidance and guarantee fund. It is referred to in the preamble to this decision and it is authorised by virtue of the meeting of the Council of 11 and 12 February. It provides for
the creation, in the Community budget, of monetary reserve, hereinafter referred to as the EAGGF monetary reserve, to offset the impact of significant and unforeseen fluctuations in the ECU/dollar parity.
We know why that is important. There may be deficits and surpluses over a period of five years. I do not see how any guarantee so far will guarantee a deficit in that fund—therefore, a deficit in the whole of the Community financing outside the envelope limits contained in the decision. Can the Paymaster General throw light on that conundrum?
If we were going through the document, we would take clause stand part article by article, and it deserves that consideration. Article 3(2) authorises commitment appropriations to increase to 1·3 per cent. of total GNP, whereas the payments limit is 1–2 per cent. How is that ratio reached, and how can there be an excess of commitment when the payments are only up to 1·2 per cent.? I suppose that it is hoped to raise those later to pay for commitments made. That would be bad accounting practice and bad for the EEC. Will the Paymaster General comment on that?
My next point relates to amendment No. 4, which was not selected, and the wording of the Bill. Line 14 refers to the undertakings by
member States, as confirmed at their meeting within the Council.
The words "within the Council" should be deleted because, as it is an intergovernmental undertaking, it is by definition outside the status of the Council, and extra-treaty. The treaty lays down that income and expenditure shall balance year by year. I should not have thought that the Council of Ministers would be competent to produce a draft for such an undertaking. It would be competent for member states meeting in some other forum or for ambassadors to exchange letters and to come to such an undertaking. Perhaps the Paymaster General can explain the phrase "within the Council".
I now draw the House's attention to article 10 of the decision. This follows on from the points made by the hon. Member for Skipton and Ripon about the rebate, which was an important feature of the article, as it was of Fontainebleau. Our rebate amounts to about £1 billion, but in spite of it, our overall deficit is still about £1 billion —so the rebate's importance is great. I am sure that the Paymaster General will agree that it is.
Article 10 reads:
The Commission shall submit, by the end of 1991, a report on the operation of the system, including a re-examination of the correction of budgetary imbalances granted to the United Kingdom, established by this Decision.

When the Prime Minister brought back this draft from Brussels there was a great shout that the rebate was safe—but this is a leasehold of only about two to three years. So there can be no cheers about it from the hon. Member for Skipton and Ripon; the Fontainebleau mechanism is only a two-year lease. I do not say that the re-examination will not be successful; it was on the occasion concerned, but it is clearly a matter of some importance in the Community that we maintain the rebate.
As any Minister will confirm, if we are to retain any derogation for the United Kingdom in any matter of policy, we must pay a price by giving way somewhere else.

Mr. Curry: indicated assent.

Mr. Spearing: I am glad to see the hon. Member for Skipton and Ripon nodding his agreement. This is how the Community works. So even if we maintain the derogation in the next cycle—it will come up again within three or four years—something else will have to go, but by the very nature of package bargaining we shall not necessarily know what.
If we had been able to examine the decision itself my points about it might not have been so truncated. I turn now to the post-Bruges situation. Over the past few weeks those of us who are interested in the EEC have read pages of comment in the heavy, informed press. We have listened to talks and interviews on the radio, and read the texts of two or three of the Prime Minister's and M. Delors' speeches. One of the most frightening things about all this is that most of the media commentators have got it either incomplete or wrong, and most of the important features from Bruges have not been dealt with in the articles and comments of otherwise informed commentators.
I shall attempt to prove this charge shortly, but I want to do so without casting aspersions on the leader writers and experts who write articles in the newspapers—or even on some of our senior politicians who make speeches on the subject. They have all sorts of other things to look at and are mainly informed about EEC matters by specialists. That is an example of the problem with which I open my speech: fewer and fewer people have the time or resources to understand what is going on. I hope the Minister will relay my comments to his right hon. and learned Friend the Foreign Secretary, who is a sponsor of the Bill, and doubtless a representative of the Foreign and Commonwealth Office will be present on Third Reading—

Mr. George Robertson: I wonder.

Mr. Spearing: This is a treaty which implements the amendments to the treaty of Rome, commonly known as the Single European Act, which was signed on behalf of this country by the right hon. Lady, the Minister of State, Foreign and Commonwealth Office. She was not a Privy Councillor when she signed it; I wonder whether that was constitutional. But I hope she will be here on Thursday—

Mr. Robertson: I join my hon. Friend in hoping that, but I am sure he will agree that it is significant that, although the Foreign Secretary opened the debate on Second Reading on 11 July, since then we have seen neither hide nor hair of the Foreign Office. The Opposition foreign affairs team has been here in numbers for long periods, and we would have expected at least a nominal Foreign Office presence. The Foreign Office contains a


large number of Ministers, even if they keep changing fast. I am sure the Paymaster General can explain their unavoidable absence.

Mr. Spearing: Perhaps we shall hear about that in the closing speech.
Now, I face the formidable task of backing up what may have appeared to some hon. Members a rash and exaggerated claim. Let us begin with social Europe. I am sorry that the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) has gone. He and I had an interesting exchange, during which he agreed that he would have preferred a social dimension in the Cockfield package, but did not oppose it because it did not contain one. I understand that no formal set of regulations or directives relating to the social dimension or social Europe has been placed before the Council of Ministers by the Commission. Obviously, Mr. Delors has his own ideas, and the Commission may have its.
The former expounded his ideas at length to the TUC. I shall not say whether they are desirable, or whether competence in this area is good or bad, but the idea was clearly a possibility. It was only a possibility, not a certainty like the Cockfield package of about 280 documents, of which we shall receive a progress report sometime between now and Christmas. The only documents about social Europe are some press releases produced by one Commissioner, and a publication officially entitled, "A Commission Working Paper SEC (88) 1148", dated 14 September 1988. It arrived in the Library the day before yesterday.
So the status of this concept, important though it may be, is nothing like as developed as that to which we are committed by 1992 through the Single European Act's amendments, and to suggest that it is immediately on offer is false. There may be a plan or idea of some importance; it may have been given informal approval at informal meetings of certain heads of Government and Ministers; but it is of a different order from the avalanche of legislation which is about to descend on us between now and the end of 1992.
This brings me to the second widespread misapprehension. It is even shared by BBC news bulletins, which usually know better. They speak of 1992 as though it were the equivalent of the big bang in the City, whereas, as the knowledgeable hon. Member for Skipton and Ripon agrees, the legislation is coming through now. By treaty and by regulation, it must be completed by 31 December 1992. Some important legislative measures dealing with public utility contracts and rights of establishment will be here long before that and may be set in concrete.
Whatever scrutiny the House can give to the legislation—the Select Committee has already considered some of it—even if we do not like it, it is still subject to majority voting in the Council of Ministers. Even if the Government and every Member of the House do not like it, it will still be possible for majority voting to make the law for this country. A parliamentary answer to me last week showed that more than 100 pieces of legislation have been given majority assent in the Council of Ministers.

Mr. Andrew Rowe: Recently I attended a conference of the European Medium and Small Businesses Union, which covers 14 countries, and the confusion that the hon. Gentleman describes could not have been more

clearly evident. Small and medium-sized businesses have been going along with enormous enthusiasm with proposals to regulate all sorts of matters which, had they not been in the context of forming this great European market, they would have resisted strongly because they would have seen in them exactly the tendencies against which they fight in their own countries. They did not perceive that many of the laws are being implemented as they are passed, not on one great date in 1992. I intervened there to point out to them that the dangers that they were running by not being clear about that point.

Mr. Spearing: I am grateful to the hon. Gentleman for backing what I said. Whatever may be our disagreements on other matters, all hon. Members can agree that public knowledge on this matter is woefully lacking, despite the publicity campaign mounted by the Secretary of State for Trade and Industry—of whom I shall say no more at the moment.

Mr. Leighton: If it is true that these matters are being decided by a majority vote and the British Parliament has no jurisdiction over them, is not the term "county council" more appropriate for the House? We, not the Commission, are being turned into a county council.

Mr. Spearing: My hon. Friend makes an excellent point. For the moment, I wish to obtain an agreement across the Committee about the present confusion and difficulty. But that will be the outcome of present events.

Mr. Cash: The analogy of county councils seems to have permeated the debate. Does the hon. Gentleman agree that the analogy drawn by the hon. Member for Newham, North-East (Mr. Leighton) is also inaccurate? A county council has powers that are conferred upon it by Parliament, and those parts of the European Communities Act 1972 that we are debating today, and all the other legislation that emanates from that Act, are granted by this Parliament. We must hang on to that central point at all times. It may be a slender thread, but it is critical and we must never forget it.

Mr. Spearing: I am grateful to the hon. Gentleman, but I should tell him that the thread is something of an umbilical cord of which the European Communities Act 1972 is one example and the Bill is another. But the nature of that "gossamer thread"—to reactivate a phrase used by a well-known right hon. Gentleman—is such that we do not always recognise its importance when it is going through. The European Communities (Amendment) Act 1986, which authorised the Single European Act, is another example. The hon. Gentleman reminds me that I should have dissented from my hon. Friend the Member for Newham, North-East (Mr. Leighton). The House gives a county council specific powers to operate in a specific area. As I understand it, the treaty of Rome does not give national Governments any specific power.
The hon. Member for Mid-Kent (Mr. Rowe) made a helpful intervention. Legislation is on flow now, and Command HC 43—one of 32 reports which the Select Committee on European Legislation will have made by the end of the Session—summarises all the legislation.
I draw the attention of the House to article 8A of the treaty of Rome, which the money that we are voting will implement. It states:


The internal market shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured in accordance with the provisions of this Treaty.
The definition of "internal frontier" has been largely misunderstood by press commentators. We think of lorries, frontiers and border checks. As I understand it—I am sure that the Foreign and Commonwealth Office will correct me if I am wrong—the article concerns not a geographical frontier but an economic, commercial, industrial and competition frontier. If a set of laws that appertains in the United Kingdom is different from that appertaining in Portugal—although goods or services may be exported by sea or wire—and therefore the law relating to that internal market differs significantly from one part to another, an internal frontier exists.
As that frontier exists, it has to be eliminated by article 8A, a very important amendment that was brought about by the Single European Act. That presupposes that legislation that differs from one territory to another is to be harmonised, and that in turn presupposes a centralised legislative authority—the Commission and the Council working in tandem, as we discussed earlier.

Mr. Cryer: I have no doubt that my hon. Friend has seen the Press Association report that Lord Cockfield has asserted today that a united states of western Europe is inevitable, complete with a central bank and a common currency. Although he was displaced for embarrassing the Government over the harmonisation of VAT, it is worth recalling that he held those views when he was appointed by the present Government. He is still asserting that union is inevitable.

Mr. Spearing: I am grateful to my hon. Friend for giving us that information. Some of us have been sitting here since 3.30 pm and we have not had that particular information. I am not surprised by what Lord Cockfield has said. Anyone who heard him perform before the Select Committee on the Treasury and Civil Service—the right hon. Member for Worthing (Mr. Higgins), whom I am glad to see in his place, was in the Chair—will know what I mean. For reasons that I shall discuss in a minute, Lord Cockfield is almost certainly correct.
I have tried to explain what I understand article 8A to mean and the obligation on the central legislative authority to legislate not only on significant matters but on matters that are judged to affect significantly the internal market and which exist either side of a frontier.

Mr. Rowe: rose—

Mr. Spearing: I shall give way in a moment.
That point highlights the importance of the new article 100A. I have read only one document that mentioned article 100A in the plethora of documents that we have received in the past three weeks. It is important because it establishes qualified majority voting in any matter relating to article 8A—the creation of the single market by a single legislative authority. Where does that definition finish? What does majority voting cover? What is the scope of legislation covered by article 100A? I have to tell you, Sir Paul, that the Select Committee on European Legislation does not know the answer.
One could think of 10,000 factors that allegedly affect the internal market, such as any piece of legislation that is

passed by a nation relating to commercial, industrial, economic or regulatory matters—regulatory matters include safety provisions and provisions for other purposes. Who will be the judge of whether it is a matter for the internal market? The court will decide and the Select Committee is now taking evidence on the use and scope of article 100A. We have not reached a conclusion or a report.
If any hon. Member thinks that he or she knows the margins and the legal limits of article 100A, let them stand up and speak. Let the Attorney-General or anybody else say that they know where it ends—I do not know. I challenge anybody to say that they do—

Several hon. Members: rose—

9 pm

Mr. Spearing: I shall now give way on that point to four hon. Gentlemen.

Mr. Cash: I would not presume to suggest the ambit or limits of article 100A. As the hon. Gentleman knows, I serve with him on the Select Committee on European Legislation. Does he not agree that, despite the fact that we had an opportunity to hear views on our suspicions about the misuse of article 100A, which goes to the heart of some of the questions that we have been discussing today—such as the manner in which the Commission or other organs of the Community may wish to extend and enlarge the competence of the Community—we had scant replies to satisfy us that there was not a misuse? In other words, we have real grounds for being concerned about the desire of people to use article 100A to get more majority voting or to get more things through in the way that the hon. Gentleman described.

Mr. Spearing: I am grateful to the hon. Gentleman for confirming my point. The question arises, where does one use article 100A instead of other articles? I shall wait for the report before I go into some of those points. That question has been reintroduced on a subject which, today of all days, is topical—the future of summer time. Originally it was to be promulgated under article 100A. There has been some back-pedalling since then, but at least one could argue that summer time is primarily a commercial and market matter and therefore comes with in the ambit of article 100A. Other people would say no. There is some debate and, I believe, some inconsistency within the Government, about which I shall say no more.
However, that issue illustrates the difficulty that we shall face about determining limits. I think that they are deliberately set very wide. If somebody challenged whether the Commission should use article 100 or article 100A—of course, the Council can question treaty bases unanimously of the Commission and change them if it wishes—he would find that a political issue on its own. We should look to the preamble of the Single European Act for some guidance. I suggest that we look there for guidance because that is where the European Court would look. Although the preamble is not part of the treaty, it counts as far as the European Court is concerned when relating to purpose.
The third paragraph of the preamble to the Single European Act states:
Resolved to implement this European Union".
The last paragraph reads:


Determined to improve the economic and social situation by extending common policies and pursuing new objectives, and to ensure a smoother functioning of the Communities by enabling the Institutions to excercise their powers under conditions most in keeping with Community interests.
Whereas at their Conference in Paris from 19 to 21 October 1972 the Heads of State or of Government approved the objective of progressive realization of Economic and Monetary Union".
That is part of the preamble to the Single European Act, which at last some Conservative Members voted through in 1986 on a guillotine and which was given full support by the Prime Minister, who also made the Bruges speech. There is some inconsistency between her comments in Bruges and the preamble to the Single European Act.
However, it is not just the Single European Act that we must look at in this regard. The Stuttgart declaration, which is entitled "Solemn Declaration on European Union", states:
The heads of State and Government of the Member States of the European Community signed the following Solemn Declaration on European Union at the conclusion of the meeting of the European Council in Stuttgart on 19 June 1983".
Paragraph 8 of the preamble states:
determined to achieve a comprehensive and coherent common political approach and reaffirming their will to transform the whole complex of relations between their States into a European Union.
All those quotations back up the report that we have had —my hon. Friend the Member for Bradford, South (Mr. Cryer) spoke of it—of Lord Cockfield claiming that European union is an inevitability. I should not necessarily agree that that is so, but I agree that the documents suggest that it is. If we take the creeping legislative competence of the Council and the Commission under article 100A, it is clear that a great deal of that legislation will displace or be capable of displacing any legislation produced by any Parliament of any member state. Therefore, there will be no element of federalism.
Today and in previous debates hon. Members on both sides of the Chamber have used the word "federalism", but it does not exist. The treaty of Rome does not have any element of genuine federalism in it that I can see. It has a great big dose of movement towards a single European union, with a single legislative centre and institutions that mirror those found in every sovereign nation state—a legislature, an Executive, a Parliament and a court. It is all there. Therefore, the threat is not one of federalism or a united states of Europe, or vague comparisons with that nation, but the development of a unitary form of government and of legislation.
The Bill will provide the money and the steam for that development. I do not expect the Paymaster General to comment too much on the last part of my speech and what I have called the post-Bruges round-up. The right hon. Gentleman may wish to leave that until Thursday. However, if anyone who, by chance, has been listening to what I have said disagrees with the facts that I have conveyed to the House or with my pessimistic interpretation of their significance, I hope that he will let me know before Thursday because, if I am fortunate enough to be chosen to speak, I have several other points to add. I believe that the British public and the House, in the post-Bruges era, have got so many things wrong that we are in great danger of not understanding the essential issues that so far I have neither read in the press nor heard on the media.

Mr. Michael Irvine: I hope that the Government recognise that the anxiety about the clause and the Bill is not confined to those who will vote against them. Four years ago the House was assured that the Fontainebleau agreement had at last provided an effective mechanism for restraining the juggernaut of agriculture spending, but we all know what happened. Agricultural spending resumed its profligate lurch onwards, the mechanism to restrain that spending simply buckled and the agreement came unstuck. Now, in this Bill, we face yet again a demand for more money accompanied by the self-same promises of future rectitude that were heard four years ago, laced with renewed assurances that all will now be well and that restraint will hereafter be the order of the day.
Two considerations in particular stick in my throat. The first is the rather disingenuous way in which exchange rate fluctuations are put forward as an excuse for the gross agriculture overspending that has taken place. Exchange rate fluctuations are inconvenient and often uncomfortable, but they are part of the commercial facts of life.
Several companies in my constituency have suffered considerably in recent years because of the weakness of the American dollar. I am sure that there are many such companies in the constituencies of other hon. Members. What has happened? Those companies have had to adapt and adjust. They are not able to go to the Government with a begging bowl. There is no soft option for them. Other industries have to take difficult decisions and have to adjust, reshape and adapt, but it appears that agriculture does not have to do that. It seems that at all costs spending on agriculture must be maintained and that agriculture must be protected from the reality that less privileged sectors of the economy are forced to face.
The second consideration that sticks in my throat is what I see as perhaps the fundamental flaw in EC decisions about the level of spending. Only three of the 12 member countries of the EC are regular net contributors. Because of occasional fluctuations there is sometimes a fourth net contributor. The two main net contributors are West Germany and ourselves. Most of the other member countries are net beneficiaries. Therefore they have an interest in weak budgetary control. Of course they are disinclined to submit to financial discipline and are happy to let the minority of net contributors take the strain. That is simply a recipe for weakness and financial indiscipline.
Four years after Fontainebleau should we say that enough is enough? Should we plunge the Community into a major crisis by refusing to pass the Bill? I confess that I have been sorely tempted to make cause on this issue with my hon. Friend the Member for Southend, East (Mr. Taylor) and his fellow rebels, On reflection, because of the crisis that would follow if the Bill were rejected and because in the EC there must be considerable give and take, it seems to me right that we should allow the powers that be one further chance. However, the Government should be aware that the patience of the House is wearing thin and that there is a limit. We will not for ever put up with lax control on spending and in particular burgeoning spending on agriculture. We shall not submit indefinitely to the financial indiscipline that has characterised EC expenditure in recent years. We must have stringent scrutiny and financial discipline. We look to the Government to persuade our European partners to accept such scrutiny and discipline.

Mr. Leighton: It is a pleasure to follow the speech of the hon. Member for Ipswich (Mr. Irvine). I agree with everything that he said, except his conclusion that we should give the Government one more chance.
We have been over this ground several times and each time it has cost us more money. The hon. Gentleman mentioned the Fontainebleau agreement. Many reassurances and guarantees were given at that time and we agreed to a 40 per cent. increase in the VAT take. The other side of the deal was that there would be financial discipline.
Some of us, including, I think, the Chairman of the Select Committee on the Treasury and Civil Service, said that if we refused to vote the extra money there would be financial discipline. If there were discipline there would be no need to vote extra money. The extra money was approved and we know what happened. The EC is coming once again and putting its hand in our pocket and asking us to approve more money. This time there is an intergovernmental agreement and £650 million is to be given just like that. There is to be another 25 per cent. increase in the Community budget.
The Ministers are in the middle of their spending round. I wonder what would happen if a Minister came along to the Treasury and said, "I increased my demand last time by 40 per cent., you were good enough to give it to me and now I am back again and I want a cash handout urgently and another 25 per cent. on my budget." We all know what the Treasury would say about that.
9.15 pm
Our net payment into the Community budget is about £1·5 billion. That is enough money to solve all the immediate problems of the National Health Service, and the problems of the universities, but we do not use it for that purpose. The Treasury is severe. It keeps a tight grip on the strings of the public purse at home. We have to have proper accounting and prudence, but not for the Common Market. The Common Market has an open cheque, and it does not matter what it spends. Parliament is being asked to agree to that, as the hon. Member for Ipswich said. The majority of the countries in the Common Market pay nothing net into the Community. Many countries that are richer than us, with a higher GDP per capita, take payments out of the budget while we, one of the poorer countries, are a paymaster.
Sometimes I hear people talking about the money that we get from the social fund as though that were a good thing, but it is only a fraction of our own money coming back. Money goes from the British taxpayer to Brussels, is translated into 10 languages, some of it stays there to pay for the bureaucracy and a fraction of it comes back. What can Brussels do with our money that we could not do better ourselves?
During the recess, the Prime Minister went to Bruges and made that famous speech. I do not know whether she will vote for the Bill. However, in her Bruges speech, she said that she is against the supranational Europe. I agree with much that she said, but the difficulty is that she voted for the Single European Act, which gave the Common market powers to do what she does not like. Some of us voted against it. Some Conservative Members voted against it, but she guillotined the Bill through. I do not know whether she has had a change of view. Perhaps she did not realise what she was doing when she forced the Single European Act through the House.
What will she do now? Are the words at Bruges empty? I suspect that they are. Our experience of the Prime Minister is that she is all bluff and bluster before she goes along to these summits and then, when it comes to the crunch, she gives way. That is what happened over the budget last time and that is what happened over the limit of £160 million on the cereals target.
Now we have the Single European Act, and several hon. Members have spoken about articles 100 and 100A. Under article 100A, which provides for majority voting, it does not matter what the Prime Minister or the House says; these changes will come into existence because we have temporarily given our powers away. Under article 100, the Prime Minister is in a difficult position. She cannot always be in a minority of one. Eventually, she has to give way. One of the reasons why she has to give way is that the rebates are guaranteed only for two years. Therefore, if she does not give way, she could lose the rebates. The Common Market has her in a sensitive spot. It has her by the rebates, so she has to be extremely careful.
When we had a referendum about staying in the Common Market, the Government issued a manifesto which said:
The Minister representing Britain can veto any proposal for a new law or a new tax if he considers it to be against British interests.
That was the basis on which we voted to stay in the Common Market. That basis has gone. The voters have been cheated by the Single European Act and do not have the slightest clue that that basis has gone.
I refer the House to the remarks of Wilfried Martens, who has been Prime Minister of Belgium for as long as the right hon. Member for Finchley (Mrs. Thatcher) has been Prime Minister here. I refer to a recent newspaper article in which he is quoted as saying:
the EEC should move from economic to full political union, where 'common sovereignty' covered foreign policy, defence and security, as well as monetary, economic, environmental and social policy.
If the EC is to have jurisdiction over all that, what is left? Jacques Delors has reiterated his view that 80 per cent. will be administered by the Common Market. The machinery of the Commission, the Council and the Parliament is already imposing measures on us that we do not want. We know that in relation to taxes. Taxes have been put on spectacles and hearing aids. I do not think that any hon. Members wanted tax levied on those items. Taxes have been levied on the construction of buildings for industrial and commercial use, water and sewerage services to industry, the supply of new services to commerce and industry, the supply of fuel and power to industry and even on protective boots and helmets supplied by employers. I do not think that any hon. Members wanted that. I do not think that the British Government wanted that, but it was foisted upon us.
We saw what happened about Austin Rover. The Government said that they had stitched up a wonderful deal between British Aerospace and Austin Rover. Then we did not hear anything about it for some months, because Commissioner Sutherland had to consider the deal, but who is Commissioner Sutherland? Who elected him? If we do not like what he is doing, how do we democratically get rid of him? He then said that he would not accept the deal, despite the fact the British Parliament and the Government had a majority in favour of it. He said that it could not be allowed because the Government were writing off too much of the debt. Then we had the spectacle


of the Chancellor of the Duchy of Lancaster coming to the Dispatch Box and saying, "I can't give my announcement because British Aerospace has had second thoughts. It doesn't know whether it can accept the deal."
I also say to my own Front Bench that if, under the present Common Market administration, the Conservative Government cannot implement their industrial policy, what chance has the Labour party of implementing its industrial policy under the laissez-faire treaty of Rome?

Mr. Holland: That issue has run for a considerable time, but we must recognise that although the provisions before us concern, under the Single European Act, the proposal to harmonise bidding on public sector contracts, they do not make it impossible for a country to pursue a policy of industrial intervention which it wishes to pursue.
The French are currently on their 10th medium-term plan. They were able to nationalise broad sectors of industry within the European Community without being stopped by the treaty of Rome and, in the early 1980s, more than half of the investment undertaken in France came through the public sector. The French have also been able to adopt planning measures directly with big business, gaining the accountability in the opening of the books on big business through the programme contract system which, as with similar policies in Belgium and Italy, were the basis for our planning proposals.
Although I agree with much of what my hon. Friend says, in this respect, I must point out that the treaty of Rome does not stop a country doing what it wants to do. I should like to see us joining other Community Governments to gain greater accountability from big business in the Community and greater leverage for public intervention.

Mr. Leighton: I welcome my hon. Friend's confidence. He mentioned France, and I remember that when Mr. Mitterrand first came to power he launched a policy of great expansion. He immediately ran into balance of payments problems, which he was unable to rectify by the taking of national steps. As France was a member of the EMS, he was unable to devalue the franc. The only alternative was to put on the brakes.
I do not want to prolong the debate with my hon. Friend, but it is wise and prudent for us all to realise that there are limitations and constraints on our national freedom to run our countries in our own way while we labour on under the present regime. If Mr. Mitterrand had the difficulties which I have described and if the present Conservative Government are not able to implement their industrial policy under Common Market regulations and the present policy of the Commission, we must realise that a Labour Government will have difficulties and problems. We must understand also that after 1992 there will be a capitalist free-for-all. That is the policy that is being developed. There are many who support the idea of the Common Market because they see it preventing a Labour Government introducing Socialist measures in the United Kingdom. I am advancing this argument to sound a warning. There are difficulties that must be borne in mind by hon. Members on both sides of the House.

Mr. Holland: I do not seek to detain the Committee. My hon. Friend was not correct when he said that the French did not devalue. In fact, they devalued twice, in 1981 and 1983. It was not the EMS that prevented

devaluation. The EMS, as it happened, enabled a more orderly management of it. As for this Government not being able to implement their industrial policy because of Community legislation, my hon. Friend will have to enlighten me. I was not aware that the Government had an industrial policy, or that they had been restrained by the Community in any specific respect.
We must make these things clear. The reason why the French Government expanded and the reason why they could not sustain that expansion was that the rest of the OECD had confidently said that it would expand and then did not do so. It is beggar-thy-neighbour deflation by Governments in Europe that has penalised countries that want to expand, and not the EMS mechanism as such.
I am not making an argument for the EMS per se. Monetary co-operation is not neutral; it can be either deflationary or expansionary. Any Government in their right mind who are members of the EMS should proceed on the conditions that Mr. Giscard D'Estaing set when he once supported President de Gaulle. In effect, he said "Yes, but …" That meant, "Yes, we shall support monetary co-operation if it is expansionary. If it is not, that system should not be supported."

Mr. Leighton: I do not think that you, Sir Paul, would wish me to continue the private debate that I am having with my hon. Friend. I look forward to continuing the debate with him on future occasions.

Mr. Bob Clay: I have listened with considerable fascination to the topical little private debate to which my hon. Friend has referred. He will be aware that the Government have a policy of privatisation, and one of the undertakings that they have allegedly being trying to privatise is British Shipbuilders. The last remaining substantial merchant shipyards that remain are run by North-East Shipbuilders Ltd., which is in my constituency. On 30 September, the deadline closed for bids from those wishing to take over these public assets. Four bids were received and we are expecting an announcement in the House at any moment.
It is speculated in the press that the announcement will be made that none of the bids is acceptable to the Government and that the yards will have to close. I am hearing from civil servants and those who are close to them that none of the bids is acceptable—if one were accepted it would keep the last merchant shipyards open in the area which I represent—because the Government could not get a bid through the Commission. If the Government cannot even privatise with a bit of state intervention, what chance would a Labour Government have of intervening in the way that we would want? It seems that the chance would be pretty slim.

Mr. Leighton: There is no doubt that we are no longer masters of our own house in these matters. That is absolutely clear. If the Government's deal between British Aerospace and the Rover Group could not go through unmolested, it is wise to take on board the fact that a Labour Government would have similar problems and I put it no higher than that.
9.30 pm
The hon. Member for Stafford (Mr. Cash), in his discussion of whether we were a county council, said that we had given those powers in the European Communities


Act 1972, but that we could take them back. That is true. I quote the manifesto issued by the Government at the time of the referendum:
The British Parliament in Westminster retains the final right to repeal the Act which took us into the Market on I January 1973. Thus our continued membership will depend on the continuing assent of Parliament.
There is no doubt that we could repeal section 2 of the 1972 Act. We could repeal the Act itself.
I believe that parliamentary sovereignty is valuable. I am not one of those people who believe that it is a reactionary idea. After all, when we gave sovereignty to the former colonies of the British empire everyone thought that that was an extremely progressive thing to do. Democratic self-government is extremely valuable. As the shoe pinches more and more and as the powers and prerogatives of the EEC take powers away from us, there will be more and more resentment in this Parliament. I will never reconcile myself to the loss of self-government by this Parliament and I look forward to the repeal of the 1972 Act.

Mr. Foulkes: As you may have appreciated, Miss Boothroyd, when you were in the Chair earlier, this has been a familiar debate with some familiar faces. However, there are two very important differences since we discussed the issue on Second Reading and before. We are now witnessing the unusual spectacle of the European Community budget moving into surplus. A number of my hon. Friends and others have said that the debate is taking place post-Bruges—a watershed which for one reason or another we shall all have reason never to forget.
It has been an interesting debate because within the general debate about the European Community's finances we have had discussions about federalism in which the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) played a large part. We have also had discussions about the political nature of Europe. When the hon. Member for Southend, East (Mr. Taylor) talks about the European Community as a Socialist conspiracy he encourages me to advocate it even more enthusiastically. However, that is a concept or perception that some of my hon. Friends do not share. We have also had a debate in the sub-theme of democratic accountability.
I want to refer to three issues and I shall be very brief in the few moments that are left. First of all, as we know, the change that will take place if the Bill is enacted will alter the nature of the funding of the European Community. One of the central bases of the funding will still be value added tax. Although that is based on a notional rate, Opposition Members and people outside the House are conscious that an intensifying pressure from the European Community will follow to harmonise VAT in the Community.
I hope that the Paymaster General will pay attention to me. We know that the Government have given a pledge in relation to VAT on children's clothes and food. However, it would be useful to have that pledge repeated tonight and a sign that the Government will in no way resile from their commitment to veto any proposal from the Community to harmonise VAT on children's clothes and food. We have not been given a pledge of the same intensity in relation to books, magazines and newspapers. Right hon. and hon. Members from all parts of the Committee have been under continuing pressure from various campaigns, whether they

be opposing a tax on reading or on learning, and aimed at persuading the Government to give the same kind of assurance in respect of books, magazines and newspapers.
We took some hope from the definitive statement made by the Prime Minister. I do not mean her statement made in Bruges but the answer that she gave to the great interrogator of Prime Ministers, Jimmy Young, on the Jimmy Young radio programme, when she made it clear that harmonisation of value added tax was not in any way a requirement and that she would continue to oppose that. She said:
Do you know they do not have all the same taxes in every state in America? They have different taxes according to their different requirements and their different history, so we do not go in to have a standardised Europe.
The United States has a common currency but it still has throughout its states different levels of value added tax. We need a restatement of the commitment concerning value added tax on children's clothing and food, and in relation to the other areas.
My second point concerns the comments made by several right hon. and hon. Members about the budget going into surplus. Community spending has increased by 150 per cent. in the past seven years. As has been said during this debate, the 1988 budget represents a 20 per cent. increase over 1987. The proposal made tonight by a number of right hon. and hon. Members, and particularly eloquently by the hon. Member for Northampton, North (Mr. Marlow), represents a 25 per cent. increase. I believe that it was the hon. Member for Northampton, North who first asked whether we could not use that money to make sure that child benefit is indexed and not frozen, as seems to be the Government's current intention. Hon. Members in other parts of the Committee have raised the question whether that money could not be used for funding the Health Service. There are many other areas that one could suggest.
The fundamental question to which the Minister should address himself when replying is why we need such an increase. If effective control of the common agricultural policy has been achieved, why do we need another increase —albeit, in this case, through a change in the funding mechanism? Will there be a substantial increase in the structural funds? We are told that the structural funds are to double, but, as they currently represent only a small proportion of the Community budget, there does not need to be a huge 25 per cent. increase to double them.
If we take the Prime Minister at her word, in respect of the antagonism that she poured out at Bruges and on other occasions towards the social fund, which is an integral and important part of the structural funds, it is evident that she will not approve any substantial increases. That is despite the fact that it is concerned with vital areas such as youth retraining and assistance for the long-term unemployed. As the United Kingdom's regional policy has also been abandoned, it does not seem to us likely that the Prime Minister will support any substantial increase in that direction. Given the increases that have taken place and the increase that is proposed, we need to know exactly what the money will be used for. Where will it go, if agricultural spending is under control and there is not to be the spending on social Europe that the Prime Minister has apparently vetoed?
I know that the Minister wants adequate time to deal with all the points that have been raised. My third and final point relates to social Europe. I am not sure why my hon.


Friend the Member for Hamilton (Mr. Robertson) has passed me a note, but I shall try to incorporate it in my remarks. 1 think that he is pointing out that some hon. Members who have managed to vote with their conscience and according to their own beliefs in past debates on this subject will not be able to do so tonight, because the Prime Minister has appointed them to posts of responsibility in government. But 1 shall not develop that theme.
The Prime Minister's attitude towards social Europe shows her real view about the Community, and the hopes that we have of seeing the Community develop. It is notable that Members of the European Parliament—some of whom are still here among us, no doubt for only a short time—have attacked the Prime Minister for her stance at Bruges. It is also interesting that the German Chancellor, a Conservative, has attacked her stance on social Europe. It is suggested in private briefings that even members of the Cabinet are critical of it.

Mr. Marlow: They keep it quiet.

Mr. Foulkes: Of course they keep it quiet, as the hon. Gentleman rightly says.
The purpose of social Europe is to protect workers' standards of living and rights hard won over the years, and to cushion them through what will otherwise be a harsh transition in the run-up to what is now commonly described as "1992". We can understand why the Prime Minister takes the approach that she does, given her attitude to the trade unions and the workers. But, as the hon. Member for Northampton, North has said, this is not just a matter for Government but one on which this Parliament shall ultimately decide, and Opposition Members hope that Parliament will take a much more enlightened view.
That may be a forlorn hope. We have heard brave speeches from the hon. Members for Northampton, North, for Southend, East and for Thanet, South (Mr. Aitken). We are constantly told that hon. Members will flock through the Lobby to vote against the Government, that Parliament is supreme and that at the end of the day Governments, propose but Parliament disposes. We are told that it does not matter whether the Bill has the approval of Government: it need not have the approval of Parliament. Increasing ranks on the Conservative Benches will support the Opposition in their criticism of the Bill.
In this clause stand part debate, which relates to the essential part of the Bill, we are providing that opportunity yet again. We challenge Conservative Members who constantly speak brave words in the House to match them with brave actions, and to join us in the Lobby to oppose the clause.

The Paymaster General: As so often on these occasions, we have had a vigorous debate. I shall try to respond to it briefly and to meet the deadline imposed on the House.
The hon. Member for Vauxhall (Mr. Holland) raised a number of points when he opened the debate on new clause 3. For instance, he mentioned the effect of 1992 on the Community budget. Those effects are likely to be fairly small. If member states import more from other member states and less from "third countries", fewer levies and duties will be collected, but if—as we suspect—the Community is more prosperous, Community GNP will be higher, giving more resources within the new 1·2 per cent. GNP ceiling.
The hon. Member for Vauxhall paraded his familiar King Charles's head of the multinational company. He made some remarks about my noble Friend, Lord Cockfield. I did not detect a marked difference of opinion between the spokesmen for the Front Benches on either side of the Committee about our attitudes to Lord Cockfield's proposals for harmonisation.
9.45 pm
The hon. Member for Vauxhall said that Fontainebleau was not worth the paper on which it was written. As it has produced £3 billion in abatements during the past three years and a further £1·6 billion this year, the hon. Gentleman uses very expensive writing paper.
The hon. Member for Vauxhall raised a number of questions about how the House would deal with the issue of European monetary union. Article 102A of the treaty of Rome, as amended by the Single European Act, makes clear that further developments in the sector of economic and monetary union necessitating institutional changes, such as the introduction of a European central bank, would require further amendment of the treaty of Rome. That in turn would require the calling of an intergovernmental conference, the unanimous agreement of all member states and approval by all national parliaments. Thus, no institutional changes will be possible without the approval of the House. Although in the past both Labour and Conservative Governments have agreed to political declarations about the desirability of the ultimate objective of European monetary union, neither the treaty of Rome nor the Single European Act nor any other Community treaty imposes an obligation upon the Community to introduce European monetary union.
My right hon. Friend the Member for Worthing (Mr. Higgins) asked me a series of questions. First, he asked me what is the limit on overdrafts under article 12(2). I must make it clear that the purpose of overdrafts under article 12(2) is to enable the Commission to meet cash flow problems and not to finance a surplus of expenditure over revenue. The scale of overdrafts is restricted to the amount of revenue remaining under the own resources decision. In 1988, therefore, overdrafts have not anticipated either the own resources decision or the IGA that are the subject of the Bill. The overdrafts have been limited to the amounts available under the pre-existing 1985 own resources decision. On that basis, the Government have made overdraft facilities available under article 2(3) of the European Communities Act 1972.
My right hon. Friend also asked whether, if there is an underspend in 1988 and the entire IGA is paid, this would allow further unplanned expenditure elsewhere. The short answer is no. The underspending in 1988 will result in a budget surplus that the Commission rightly proposes should be carried forward to 1989. The effect of that would be to reduce the level of member states' contributions in 1989 by comparison with what otherwise would have been the case.
My right hon. Friend raised the question of the amount of the IGA seeming oddly precise for a sum intended to be a maximum figure to balance the budget. The size of the IGA was determined in the light of the expenditure decisions taken line by line on the 1988 budget by the budgetary authority. It is, therefore, rightly a precise


extra expenditure on agriculture may not be called up. In fact, we now know that it is unlikely to be so. The amounts payable under the IGA, apart from contributions to the monetary reserve, can be precisely stated in advance.
My right hon. Friend asked what action the Commission proposes to take account of the effect of the United States drought on Community expenditure. The Commission has announced that it intends to bring forward an amending letter to the 1989 budget which will, among other things, take account of the prospective surplus in 1988. Although the figures have not been finalised, the Commission's current estimate is for a surplus of 2,000 mecu, comprising an increase in receipts of 700 mecu and reduced expenditure of 1,300 mecu, of which approximately 1,000 mecu would be in agriculture.
For 1989 the Commission has proposed a reduction in the FEOGA guarantee of almost 1·46 ecu to allow for the effects of the United States drought on world agricultral prices.
My right hon. Friend asked why farming should be protected from the effects of exchange rate changes, which is a question that he has asked before. I am not sure that we can give a full explanation of why agriculture has a special place in the treaty of Rome, but it clearly does. For example, article 39 gives the objectives of the CAP. It includes the need to stabilise markets and to ensure reasonable prices.
The Government support the need to open up the agricultural sector so that it is more responsive to market forces. They also support the Commission's aims to phase out MCAs by 1992. As to who enforces regulations as 2891/77 the answer is the European Court of Justice, to which, of course, individual plaintiffs could take cases.
My right hon. Friend the Member for Worthing (Mr. Higgins) said that the Bill amends the treaty of Rome and asked why we do not amend it to restrict the rights of the Parliament. I am afraid that the Bill does not do that, and without amending the treaty of Rome we cannot infringe upon the treaty rights of the parliament over DNO. The way in which the own resources decision reinforces budget discipline is by limiting the amount of total resources available for all types of expenditure. I am perfectly happy to enter into a dialogue with my right hon. Friend on that issue.
The hon. Member for Bow and Poplar (Ms. Gordon) asked about the committee to be set up under the directive on GNP. The hon. Member for Vauxhall asked whether the committee would consider the way in which the budget is spent. The answer is no. Its role will be to help to ensure that data provided by member states on their respective GNPs are compiled in a comparable manner and provided in an orderly way to the Commission. That is an important role given the increased importance to be given to GNP when calculating contributions to the Community budget.
My hon. Friend the Member for Northampton, North (Mr. Marlow) asked what would happen if the Bill failed and what would be the effect on the United Kingdom's net and gross contributions. My hon. Friend the Member for Eastbourne (Mr. Gow) asked a similar question during the points of order raised earlier. If that happened I would certainly find myself leaving Her Majesty's Government and, without consulting the Patronage Secretary, I have a feeling that he might too.
Of course it is open to the House to reject the Bill if it sees fit, but the consequences would be extremely damaging for the United Kingdom and for Europe. The February European Council agreement was a package achieved after long and difficult negotiations. In that package we secured a legally binding budget discipline, important reforms of the CAP, in particular the introduction of stabilisers, and we preserved the Fontainebleau abatement. All that would be thrown back into the melting pot if we failed to implement the package.
The question that my hon. Friend the Member for Northampton, North put about our contribution is purely hypothetical. On 15 February the Prime Minister told the House that the Brussels package would increase the United Kingdom's net payment by a maximum of about £300 million a year compared with what might have happened with the continuation of the 1·4 per cent. ceiling. That remains our best estimate and a revised forecast will appear in this year's Autumn Statement.
The hon. Member for Newham, South (Mr. Spearing) raised a series of questions relating to why there was a ceiling on commitments of 1·3 per cent. of Community GNP. The 1·3 per cent. ceiling on commitments is in article 3 of the own resources decision, the purpose of which is to ensure an orderly relationship between commitments and payments. Such a relationship will help us to avoid the problems of the mid-1980s, when commitments grew much faster than payments—the so-called cost of the past. The commitment ceiling of 1·3 per cent. of GNP is above the payment ceiling of 1·2 per cent. In a situation where expenditure is growing, it is natural for commitments to exceed payments. Commitments cover payments for future years as well as payments for the year in which they are entered into the budget.
The hon. Member for Newham, South asked about decisions made within the Council. He is perfectly correct to draw a distinction between agreements of the Council and agreements between member states. The distinction is clear in the Bill as it is now worded. I assure the hon. Gentleman that we shall not allow that distinction to be blurred.
From time to time member states meet within the framework of the Council and reach conclusions that are not Council conclusions, but rather conclusions of the member states. That is the case with the 1988 intergovernmental agreement. It is accurate to refer to the IGA as an agreement between member states confirmed at their meeting within the Council.
The hon. Member for Newham, South congratulated my hon. Friend the Member for Skipton and Ripon (Mr. Curry) on what I thought was an extremely thoughtful speech. The hon. Member for Newham, South went on to ask questions relating to what he described as the "post-Bruges" situation. He asked a question about the "leasehold" on the rebate, but I remind him that that is an unfair comment. The new abatement system is not limited in any way. It will last as long as the new own resources decision. It can be changed only by the unanimous agreement of all member states and after approval by all national parliaments. Exactly the same was true during the post-Fontainebleau period, although there was a de novo examination by the Commission.
Various Opposition Members mentioned the absence of the Foreign Secretary, who was present on Second Reading, when the shadow Foreign Secretary was


noticeably absent. It is a sign of the unfamiliarity of the Opposition Front Bench with what goes on in Europe that they are unaware that there is a Foreign Affairs Council today at which my right hon. and my right hon. and learned Friend are present.
The hon. Member for Newham, North-East (Mr. Leighton) asked about the qualified majority voting now applying to taxation, but that is not true. Under article 99, all tax proposals demand unanimity whether or not they are part of the internal market programme. I am grateful to my hon. Friend the Member for Ipswich (Mr. Irvine) for giving the Government the benefit of the doubt.
That brings me to new clause 3, which the hon. Member for Vauxhall moved. His concern for what he described as an exercise in transparency is the first evidence that I have seen of the Opposition Front Bench taking an interest in these matters. I would give them the benefit of the doubt that they have a continuing interest in it. I assure the hon. Gentleman that the matters that he wants to see in his report are amply covered in the information which the Government already make available to the House.

Mr. Holland: Sometimes one wonders how much attention the Paymaster General pays to our points. If he looks at the Hansards of our previous debates, he will find that I constantly push the theme of transparency. On the earlier matter that he raised, he should be re-advised by the Treasury Bench. If there are increased imports to the Community, revenues will rise, not fall.

Mr. Brooke: I spoke of fewer imports. The hon. Gentleman rehearsed several areas where he would like to see improvements and I am happy to write to him to show him where he can find them. These subjects are already adequately covered.
The hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) asked where the increase in the budget was to go. For the first time, the Community has a five-year spending plan, the so-called financial perspective, which shows precisely where the additional resources might be spent. I commend to him the inter-institutional agreement, to which the perspectives are annexed. He asked, most extraordinarily and late at night on a wholly different debate, for a restatement of the Government's commitment on VAT. He knows perfectly well what our commitments are and he ran over the familiar subjects—for example, food, children's clothes and domestic fuel.

Mr. Foulkes: rose—

Mr. Brooke: I am dealing with the subject of this clause, Miss Boothby—[Laughter.] Miss Boothroyd. I am trying to finish by an agreed time.
Clause 1 contains prudent measures secured by hard negotiation. This is a pragmatic Government who respond to the circumstances of the various matters on which we must negotiate. I am proud to put this clause before the House and I share with my right hon. Friend the Prime Minister the collective responsibility of the whole Government. Her speech in Bruges admirably made clear where the Government stand.

Mr. Spearing: As you know, Miss Boothroyd, this is exempted business, so the haste with which the Paymaster General has uncharacteristically completed his speech

must have something to do with an understanding between Front Bench spokesmen—but nothing to do with Back Benchers.
10 pm
Why will the right hon. Gentleman not accept new clause 3? Will he consider taking the Bill no further tonight, because if we continue until later we may encroach on the time for a prayer which, as he knows, is time-limited?

Mr. Brooke: As I said, we shall not accept new clause 3 because the things it asks for are adequately covered in other Government publications, notices and statements, which are issued throughout the year.

Mr. Marlow: My right hon. Friend said that if the clause were defeated tonight he would feel that he had to resign. We should all be sorry—

It being Ten o'clock, The Second Deputy Chairman left the Chair to report Progress and ask leave to sit again.

Committee report Progress.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the European Communities (Finance) Bill may be proceeded with, though opposed, until any hour.—[Mr.Sackville.]

European Communities (Finance) Bill

Again considered in Committee.

Question again proposed, That the clause stand part of the Bill.

Mr. Marlow: We should not want my right hon. Friend to resign, but the reason that he gave for having to was that the Government gave a commitment. But the Government gave a commitment about the Bill before Bruges, at a time when the Community was running out of funds. Now that the Community has money there is no need to pass the Bill, because it is not short of funds. I assure my right hon. Friend that we shall not require his resignation if the Government lose the clause this evening. So perhaps he will change his mind, and then we may get financial discipline in the Community.

Question put, That the Clause stand part of the Bill:—

The Committee divided: Ayes 290, Noes 157

Division 451]
[10.01 pm


AYES


Alexander, Richard
Benyon, W.


Alison, Rt Hon Michael
Bevan, David Gilroy


Allason, Rupert
Biffen, Rt Hon John


Amess, David
Blackburn, Dr John G.


Amos, Alan
Blaker, Rt Hon Sir Peter


Arbuthnot, James
Bonsor, Sir Nicholas


Arnold, Jacques (Gravesham)
Boscawen, Hon Robert


Arnold, Tom (Hazel Grove)
Boswell, Tim


Ashby, David
Bottomley, Peter


Ashdown, Paddy
Bottomley, Mrs Virginia


Aspinwall, Jack
Bowden, A (Brighton K'pto'n)


Atkinson, David
Bowden, Gerald (Dulwich)


Baker, Rt Hon K. (Mole Valley)
Bowis, John


Baker, Nicholas (Dorset N)
Boyson, Rt Hon Dr Sir Rhodes


Baldry, Tony
Braine, Rt Hon Sir Bernard


Banks, Robert (Harrogate)
Brandon-Bravo, Martin


Barnes, Mrs Rosie (Greenwich)
Brazier, Julian


Batiste, Spencer
Bright, Graham


Beith, A. J.
Brittan, Rt Hon Leon


Bellingham, Henry
Brooke, Rt Hon Peter


Bendall, Vivian
Brown, Michael (Brigg &amp; CI't's)


Bennett, Nicholas (Pembroke)
Browne, John (Winchester)






Bruce, Ian (Dorset South)
Hawkins, Christopher


Buck, Sir Antony
Hayhoe, Rt Hon Sir Barney


Burns, Simon
Hayward, Robert


Burt, Alistair
Heathcoat-Amory, David


Butcher, John
Heddle, John


Butler, Chris
Heseltine, Rt Hon Michael


Butterfill, John
Higgins, Rt Hon Terence L.


Campbell, Menzies (Fife NE)
Hill, James


Carlisle, Kenneth (Lincoln)
Hogg, Hon Douglas (Gr'th'm)


Carttiss, Michael
Holt, Richard


Cash, William
Hordern, Sir Peter


Channon, Rt Hon Paul
Howard, Michael


Chapman, Sydney
Howarth, Alan (Strat'd-on-A)


Chope, Christopher
Howarth, G. (Cannock &amp; B'wd)


Clark, Dr Michael (Rochford)
Howe, Rt Hon Sir Geoffrey


Clarke, Rt Hon K. (Rushcliffe)
Howell, Ralph (North Norfolk)


Colvin, Michael
Hughes, Robert G. (Harrow W)


Conway, Derek
Hunt, David (Wirral W)


Coombs, Anthony (Wyre F'rest)
Hunt, John (Ravensbourne)


Coombs, Simon (Swindon)
Hunter, Andrew


Cope, Rt Hon John
Irvine, Michael


Cormack, Patrick
Jack, Michael


Couchman, James
Jackson, Robert


Cran, James
Jessel, Toby


Currie, Mrs Edwina
Johnson Smith, Sir Geoffrey


Curry, David
Johnston, Sir Russell


Davies, Q. (Stamf'd &amp; Spald'g)
Jones, Gwilym (Cardiff N)


Davis, David (Boothferry)
Jones, Robert B (Herts W)


Day, Stephen
Kellett-Bowman, Dame Elaine


Devlin, Tim
Kennedy, Charles


Dorrell, Stephen
Key, Robert


Douglas-Hamilton, Lord James
King, Roger (B'ham N'thfield)


Dunn, Bob
Kirkhope, Timothy


Durant, Tony
Knapman, Roger


Dykes, Hugh
Knight, Greg (Derby North)


Eggar, Tim
Knight, Dame Jill (Edgbaston)


Emery, Sir Peter
Knowles, Michael


Evans, David (Welwyn Hatf'd)
Knox, David


Evennett, David
Lamont, Rt Hon Norman


Fallon, Michael
Lang, Ian


Favell, Tony
Latham, Michael


Fearn, Ronald
Lee, John (Pendle)


Fenner, Dame Peggy
Leigh, Edward (Gainsbor'gh)


Field, Barry (Isle of Wight)
Lennox-Boyd, Hon Mark


Finsberg, Sir Geoffrey
Lightbown, David


Fishburn, John Dudley
Lloyd, Sir Ian (Havant)


Fookes, Miss Janet
Lloyd, Peter (Fareham)


Forman, Nigel
Lord, Michael


Forsyth, Michael (Stirling)
Lyell, Sir Nicholas


Forth, Eric
McCrindle, Robert


Fowler, Rt Hon Norman
Macfarlane, Sir Neil


Fox, Sir Marcus
MacGregor, Rt Hon John


Freeman, Roger
MacKay, Andrew (E Berkshire)


French, Douglas
Maclean, David


Fry, Peter
McLoughlin, Patrick


Gale, Roger
McNair-Wilson, Sir Michael


Gardiner, George
McNair-Wilson, P. (New Forest)


Gilmour, Rt Hon Sir Ian
Madel, David


Glyn, Dr Alan
Major, Rt Hon John


Goodhart, Sir Philip
Malins, Humfrey


Goodson-Wickes, Dr Charles
Mans, Keith


Gorst, John
Maples, John


Gow, Ian
Marland, Paul


Gower, Sir Raymond
Marshall, Michael (Arundel)


Grant, Sir Anthony (CambsSW)
Martin, David (Portsmouth S)


Greenway, Harry (Ealing N)
Mates, Michael


Greenway, John (Ryedale)
Maude, Hon Francis


Gregory, Conal
Maxwell-Hyslop, Robin


Grist, Ian
Mayhew, Rt Hon Sir Patrick


Ground, Patrick
Mellor, David


Gummer, Rt Hon John Selwyn
Meyer, Sir Anthony


Hamilton, Hon Archie (Epsom)
Miller, Sir Hal


Hamilton, Neil (Tatton)
Mills, Iain


Hampson, Dr Keith
Mitchell, Andrew (Gedling)


Hanley, Jeremy
Mitchell, David (Hants NW)


Hannam, John
Monro, Sir Hector


Hargreaves, A. (B'ham H'll Gr')
Moore, Rt Hon John


Hargreaves, Ken (Hyndburn)
Morris, M (N'hampton S)


Harris, David
Morrison, Sir Charles


Haselhurst, Alan
Morrison, Rt Hon P (Chester)





Moss, Malcolm
Spicer, Sir Jim (Dorset W)


Mudd, David
Spicer, Michael (S Worcs)


Neale, Gerrard
Squire, Robin


Nelson, Anthony
Stanbrook, Ivor


Nicholls, Patrick
Steen, Anthony


Nicholson, David (Taunton)
Stern, Michael


Nicholson, Emma (Devon West)
Stevens, Lewis


Onslow, Rt Hon Cranley
Stewart, Andy (Sherwood)


Oppenheim, Phillip
Stewart, Ian (Hertfordshire N)


Page, Richard
Stradling Thomas, Sir John


Paice, James
Summerson, Hugo


Parkinson, Rt Hon Cecil
Tapsell, Sir Peter


Patnick, Irvine
Taylor, John M (Solihull)


Patten, John (Oxford W)
Taylor, Matthew (Truro)


Pattie, Rt Hon Sir Geoffrey
Tebbit, Rt Hon Norman


Pawsey, James
Thompson, Patrick (Norwich N)


Peacock, Mrs Elizabeth
Thorne, Neil


Powell, William (Corby)
Thurnham, Peter


Price, Sir David
Townsend, Cyril D. (B'heath)


Raffan, Keith
Tracey, Richard


Raison, Rt Hon Timothy
Tredinnick, David


Redwood, John
Twinn, Dr Ian


Rhodes James, Robert
Vaughan, Sir Gerard


Riddick, Graham
Waddington, Rt Hon David


Ridley, Rt Hon Nicholas
Wakeham, Rt Hon John


Ridsdale, Sir Julian
Walden, George


Roberts, Wyn (Conwy)
Wallace, James


Roe, Mrs Marion
Waller, Gary


Rossi, Sir Hugh
Walters, Sir Dennis


Rost, Peter
Ward, John


Rowe, Andrew
Wardle, Charles (Bexhill)


Rumbold, Mrs Angela
Warren, Kenneth


Sackville, Hon Tom
Wheeler, John


Sayeed, Jonathan
Whitney, Ray


Scott, Nicholas
Widdecombe, Ann


Shaw, David (Dover)
Wiggin, Jerry


Shaw, Sir Giles (Pudsey)
Wilkinson, John


Shaw, Sir Michael (Scarb")
Wilshire, David


Shelton, William (Streatham)
Wolfson, Mark


Shepherd, Colin (Hereford)
Wood, Timothy


Shersby, Michael
Young, Sir George (Acton)


Skeet, Sir Trevor



Smith, Sir Dudley (Warwick)
Tellers for the Ayes:


Smith, Tim (Beaconsfield)
Mr Tristan Garel-Jones and


Soames, Hon Nicholas
Mr Michael Neubert




NOES


Adams, Allen (Paisley N)
Coleman, Donald


Anderson, Donald
Cook, Frank (Stockton N)


Archer, Rt Hon Peter
Corbett, Robin


Armstrong, Hilary
Cousins, Jim


Ashton, Joe
Crowther, Stan


Banks, Tony (Newham NW)
Cryer, Bob


Barnes, Harry (Derbyshire NE)
Cummings, John


Battle, John
Davies, Ron (Caerphilly)


Beaumont-Dark, Anthony
Davis, Terry (B'ham Hodge H'I)


Beckett, Margaret
Dixon, Don


Bell, Stuart
Dobson, Frank


Benn, Rt Hon Tony
Doran, Frank


Bennett, A. F. (D'nt'n &amp; R'dish)
Dover, Den


Bermingham, Gerald
Duffy, A. E. P.


Blair, Tony
Eadie, Alexander


Boateng, Paul
Ewing, Harry (Falkirk E)


Body, Sir Richard
Fatchett, Derek


Boyes, Roland
Fields, Terry (L'pool B G'n)


Bray, Dr Jeremy
Flannery, Martin


Brown, Gordon (D'mline E)
Flynn, Paul


Brown, Nicholas (Newcastle E)
Foster, Derek


Brown, Ron (Edinburgh Leith)
Foulkes, George


Buchan, Norman
Fraser, John


Buckley, George J.
George, Bruce


Budgen, Nicholas
Godman, Dr Norman A.


Caborn, Richard
Golding, Mrs Llin


Campbell, Ron (Blyth Valley)
Gordon, Mildred


Campbell-Savours, D. N.
Gorman, Mrs Teresa


Clark, Dr David (S Shields)
Gould, Bryan


Clay, Bob
Griffiths, Nigel (Edinburgh S)


Clelland, David
Grocott, Bruce


Clwyd, Mrs Ann
Hardy, Peter


Cohen, Harry
Haynes, Frank






Henderson, Doug
O'Brien, William


Hinchliffe, David
O'Neill, Martin


Hogg, N. (C'nauld &amp; Kilsyth)
Patchett, Terry


Holland, Stuart
Pike, Peter L.


Home Robertson, John
Powell, Ray (Ogmore)


Hood, Jimmy
Prescott, John


Hoyle, Doug
Primarolo, Dawn


Hughes, John (Coventry NE)
Radice, Giles


Hughes, Robert (Aberdeen N)
Redmond, Martin


Hughes, Roy (Newport E)
Rees, Rt Hon Merlyn


Illsley, Eric
Reid, Dr John


Ingram, Adam
Robertson, George


Janner, Greville
Rogers, Allan


John, Brynmor
Rooker, Jeff


Jones, Barry (Alyn &amp; Deeside)
Ross, Ernie (Dundee W)


Jones, Martyn (Clwyd S W)
Sedgemore, Brian


Lamond, James
Sheerman, Barry


Leadbitter, Ted
Shepherd, Richard (Aldridge)


Leighton, Ron
Short, Clare


Lestor, Joan (Eccles)
Skinner, Dennis


Lewis, Terry
Smith, C. (Isl'ton &amp; F'bury)


Livingstone, Ken
Soley, Clive


Lloyd, Tony (Stratford)
Spearing, Nigel


Lofthouse, Geoffrey
Steinberg, Gerry


Loyden, Eddie
Stott, Roger


McAllion, John
Strang, Gavin


McAvoy, Thomas
Taylor, Mrs Ann (Dewsbury)


McCartney, Ian
Taylor, Teddy (S'end E)


Macdonald, Calum A.
Thompson, Jack (Wansbeck)


McFall, John
Townend, John (Bridlington)


McKay, Allen (Barnsley West)
Turner, Dennis


McKelvey, William
Vaz, Keith


McLeish, Henry
Walker, Bill (T'side North)


McWilliam, John
Wall, Pat


Mahon, Mrs Alice
Wardell, Gareth (Gower)


Marek, Dr John
Williams, Rt Hon Alan


Marlow, Tony
Williams, Alan W. (Carm'then)


Martlew, Eric
Wilson, Brian


Meale, Alan
Winnick, David


Michie, Bill (Sheffield Heeley)
Winterton, Mrs Ann


Molyneaux, Rt Hon James
Wise, Mrs Audrey


Morgan, Rhodri
Worthington, Tony


Morley, Elliott
Young, David (Bolton SE)


Morris, Rt Hon J. (Aberavon)



Mowlam, Marjorie
Tellers for the Noes:


Mullin, Chris
Mr. Ken Eastham and


Murphy, Paul
Mr. Alun Michael.


Nellist, Dave

Question accordingly agreed to.

Mr. Spearing: On a point of order, Miss Boothroyd. I think that the next matter that the Committee will decide is whether to divide on new clause 3. If not, it will be new clause 4.

The Second Deputy Chairman: Order. We have moved to the Question on clause 2, which I shall now put.

Clause 2 ordered to stand part of the Bill.

Mr. Spearing: On a point of order, Miss Boothroyd. Had I or my hon. Friends wished to divide on new clause 3, which had been selected, there would now be another Division, taking approximately 15 minutes. You will know, Miss Boothroyd, because you were in the Chair at the time, that the business motion was passed at 10 o'clock. You will also notice on the Order Paper that the business after the Committee has decided to finish is a prayer. No penalty time is available, so that debate must finish at 11.30 pm, come what may. Therefore, any time taken now in any Division, such as a Division on new clause 3, and any debate or Division on new clause 4 will automatically reduce the time available to Her Majesty's Opposition in debating the prayer.
I am willing to believe that that is an unusual circumstance that has come about through inadvertence, but I hope that you, Miss Boothroyd, will confirm that what I have said is correct and that others who are listening may take note of this so that it does not happen again because it may be said to restrict unduly the freedom of speech, which the Government are beginning to do in several different ways.

The Second Deputy Chairman: No request has been made for a Division on new clause 3. What the hon. Gentleman says is absolutely correct. We must now move to new clause 4.

New clause 4

HOUSE OF COMMONS APPROVAL OF SUBORDINATE ACTION

"No Minister of the Crown shall give assent to any Regulation, Directive or other instrument relating to the operation of the Decision named in section 1(e) unless the text of that instrument has been approved by a Resolution of the House of Commons.".—[Mr. Spearing.]

Brought up, and read the First time.

Mr. Spearing: I beg to move, That the clause be read a Second time.
I am grateful for your confirmation of the point that I made, Miss Boothroyd, because, in effect, the House has been prevented from having a Division on a rather important piece of glasnost. The Paymaster General said that all these things are available in different Government publications. I am not sure whether that is correct.
We have now moved from new clause 3 to new clause 4, in my name, which would require the Government to bring before the House any directive or regulation from Brussels in pursuance of the document that we are discussing, the decision for future taxation of the Community—[Interruption.]

The Second Deputy Chairman: Order. May we have a little more order in the Chamber? It is difficult for the hon. Member for Newham, South (Mr. Spearing) to be heard.

Mr. Spearing: I am obliged to you, Miss Boothroyd.
New clause 4 reads:
No Minister of the Crown shall give assent to any Regulation, Directive or other instrument relating to the operation of the Decision named in section 1(e) unless the text of that instrument has been approved by a Resolution of the House of Commons.'.
We are always told that the power of the House lies in its power to approve money and expenditure. That is an underlying constitutional matter that has been assumed not only in the House, but in the country since 1688. Those of us who attended the great ceremony in Westminster Hall not long ago will not be unaware of that fact. At this time the importance of that cannot be over-emphasised.—[Interruption.]

The Second Deputy Chairman: Order. I have already appealed for order in the Chamber. I should be most grateful if those hon. Members who wish to carry on conversations would do so behind the swing doors.

Mr. Spearing: The matter that I wish to advance is of considerable constitutional importance. In effect, it has been on the Order Paper far only a few hours because, although it appeared on Friday, we all know what happens on Fridays and hon. Members who did not arrive early


today may not have had an opportunity to study it and understand its full import. Partly because of that and because of the constraints of time, my speech will be brief and probing. Any hon. Member who is not interested in the powers of the House and who does not wish to stay until the end of the debate is not constrained by any Whippery so to do.
In the previous debate, we talked a great deal about scrutiny and about the power of Ministers in Brussels to do this, that or the other. Under the Single European Act, their powers have been greatly reduced. In Brussels, there is now majority voting on a vast range of legislation, but we still have some control over money. In the previous debate, the Paymaster General, wagging his finger metaphorically at some of my hon. Friends, said that anything to do with taxation was still unanimous. Of course, in that respect he is defending Treasury rights.
Hon. Members should bear in mind the rights of the House. The Paymaster General knows, and the Prime Minister has emphasised, that she cannot get public expenditure through or reduce it unless the House permits. By our decision on Thursday, we shall hand over to the Commission vast areas of choice or discretion on expenditure. Following that decision, directives and regulations, including the annual budget and the annual increase in ratios, will be produced year on year.
The Bill is the outer envelope, and if, as we have heard, the Community is flush with money, it may not be necessary to go to the limits of legal expenditure, and regulations and budgets will show ratios and figures to delineate the amount. Year by year, the Scrutiny Committee and the House will receive financial regulations and directives. When those come before the Council of Ministers, the Paymaster General or some other Minister from the Treasury will go to Brussels to argue, bargain and put the Treasury point of view. On behalf of the United Kingdom, that Minister will agree disagree to a proposal from the Commission.
I hope that if I have said anything wrong the Paymaster General will briefly intervene. He has argued our case in Brussels for many years and is a most experienced operator, whereas I am not even allowed into the room to hear what will happen. That is one of the engines of authoritarianism as we know it in Brussels. The Paymaster General is our agent in Brussels doing his best for Britain. When he has agreed the document, it will come here for debate but probably not even approval. In many cases the decision will be made after an advisory debate in the Chamber probably brought about by the resolution of 30 October 1980 which says that if the Scrutiny Committee says that there will be a debate prior to a decision in Brussels, there will be a debate in the House.
The House will not have any control. It will have a preliminary and advisory debate and the Minister, who may not be the effective and efficient Paymaster General, will go to Brussels to do what he can and will then return to tell us what he has done. He may do things that are contrary to the will of the House, and the only penalty for that is in the hands of the House. Even if he resigns, what is done in Brussels is done, and the House has lost control of that financial part of its powers that stems from the

envelope created by this decision. We call it a decision, but it is a package of many, varied and complex financial arrangements.
I believe that the Committee, on second thoughts, would not wish that arrangement to carry on for very much longer, if only because the discipline we were promised at Fontainebleau, and which was advertised as being promised in this decision, has not worked. Judging by the exchanges tonight, particularly between the right hon. Member for Worthing (Mr. Higgins), the Minister and myself, it does not look as if it will work in the future. In that case, the Committee will want to have the control of these matters that it does not have at the moment. The only way that the Committee can do that effectively is to pass an amendment on the lines of my new clause, so that it says to a Minister or a Government, "Bring us a proposal that the Commission has on the table, and if we approve it, go away and approve that," or, "Put it on the table here and we can give you on a motion or a resolution some sort of limits within which you can work. Go away to Brussels and negotiate within those limits."
Unless and until such a motion is carried by the Committee, either as a free-standing resolution or as an amendment, the Minister is not properly responsible to the Committee. He can come and tell us what he has done. He is accountable in a verbal sense for what he has done, but he is doing it as a representative and the Committee has not the same sort of control that it would have if we had a period of debate on estimates, as we do for domestic expenditure. Therefore, there is an entirely different procedure relating to the £3,000 million or £4,000 million that automatically goes direct to Brussels, when compared to what comes to us in domestic expenditure.
Unless we have some control over the Minister in the way that I have outlined, the House will lose control not just over legislation, as we have already, particularly through article 100A, but over what its own Government and Ministers do and approve in Brussels. That is a fundamental breach of the 300-year-old principle that alone gives this House power and authority to tax and to decide how money shall be spent. The new envelope of GNP will make good the deficit in existing own resources. The House decided that it would supply the deficit in the Crown's lack of money after its own revenues and resources had been taken into account. This is the deep constitutional principle on which the power of the House rests, and we should look at it most carefully.
I am opening a debate that needs much more time and much more internal discussion among hon. Members than we can give it tonight. It has been before us for only a few hours, and it is of fundamental importance.
If it is not done properly in the Bill, which is what I should like to see, it should come in another time. The Prime Minister has set the scene because in her speech in Luxembourg—the second in her Bruges series—she said something about being accountable to Parliament. "Accountable" is a financial term.
I put it to the Committee and to the Paymaster General that that accountability can be discharged only if the House decides what taxation moneys shall be sent to Brussels. If it is decided by the Executive in Whitehall, then it is entirely within the Euro-United Kingdom executive area. The legislature has lost its control, and that control must be reasserted. Because of the slippage of discipline


and the 25 per cent. additional moneys being provided for the next five years under this decision, it is high time that that was done.
I hope that the Paymaster General will briefly tell us if he is against the general outline proposition that I am making—it is only an outline, but a fundamental one—why he is against it. I do not believe that the Government's stance, even as a loyal member of the European Community, will work. Any hon. Member who believes wholeheartedly in that institution should support my new clause, because without it, the mechanism will not work properly as it is intended to. Therefore, I look forward, in this introductory debate, to hearing what the Paymaster General has to say on both factual and constitutional grounds.

Mr. Brooke: With slightly more time than on the previous occasion, let me apologise for the way that I addressed you, Miss Boothroyd, on the previous occasion.
The number of hon. Members in the Chamber exceeds the number who were present for the majority of the debate, but I realise that they are not necessarily here to hear the hon. Member for Newham, South (Mr. Spearing) and me, and I shall therefore be brief.
I owe an apology to the hon. Member for Newham, South, because he takes a keen interest in these matters, and the hon. Member for Vauxhall in that, to try to meet an artificial deadline in terms of winding up the previous debate, I did not speak at fully appropriate length on new clause 3. I shall write to the hon. Gentleman, as an olive branch in respect of these proceedings, with a copy to the hon. Member for Vauxhall, setting out at greater length the case that I have sought to put.
I fully accept the need for the Government to take careful note of the views of the House whenever possible before agreeing directives or regulations linked to the new own resources decision, but—I do not intend the next remark ironically, although it may be so taken—I nevertheless urge hon. Members to reject the new clause as it would impose an excessive and unnecessary constraint on the Government's freedom of action.
There may be occasions when the Government have to move quickly and agree to a directive or regulation linked to the new ORD when it has not proved possible to secure the assent of the House by way of a resolution. The hon. Member for Vauxhall quoted one such example in his opening speech in the clause 1 stand part debate, in which his hon. Friend the Member for Newham, South intervened on the subject of the GNP directive. I shall not rehearse the whole narrative relating to the GNP directive, but the hon. Member for Newham, South made the point in his intervention about the circumstances of that particular case and the timetable with which we were all confronted at the time.
However, even leaving aside the special circumstances, such as the GNP directive, I am still not persuaded that it would be right to require a resolution of the House before a directive or regulation linked to the new ORD might be adopted. There are two other reasons for that. The existing scrutiny arrangements work well. Under those arrangements, proposals for new directives or regulations linked to the ORD are submitted to the Scrutiny Committee which can then recommend them for debate, if that would be appropriate. Unless there are special circumstances, the

Government will not adopt the directive or regulation concerned until the debate has taken place. I was certainly not aware that there were any serious shortcomings in those arrangements.
The hon. Member for Newham, South referred to me as an agent of the House in terms of what goes in Brussels. One's negotiating freedom would be severely constrained if all one's proposals were publicly stated in advance. I also commend to the House the fact that Mr. Delors, who was quoted earlier, went out of his way in the famous speech in Strasbourg on 6 July, to which so much attention has been paid, to draw attention to the amount of attention that this House and the Bundestag in Bonn pay to Community legislation by comparison with the other 10 member states.
If we were to agree to a provision such as is outlined in the new clause, we would thereby set a precedent for the handling of other types of Community legislation. In other words, the repercussions would go very wide indeed. The new clause would represent the thin end of a very important wedge. It would be wrong to prejudice the general discussion of scrutiny procedures by introducing special arrangements for one small class of Comm unity legislation in the way proposed in the new clause. On those grounds, I hope that the hon. Member for Newham, South will not press his new clause. If he does, I recommend my hon. Friends to reject it.

Mr. Cryer: The House is crowded because many hon. Members are here to vote and then leave; they are not interested in the Bill. That is not good enough. The proposed legislation is eroding the sovereignty of this place, and the erosion has continued for too long and has been allowed to go too far.
What is wrong with the Minister getting, as the new clause suggests, some sort of approval from the House before negotiations are entered into? It would be a strengthening measure. The Minister could argue with the strength and support of the House behind him, if that were the decision, or use the decision of the House as a bargaining counter in negotiations in the EEC.
There are those who imagine that the EEC is a sort of western European fraternal gathering, but it is not like that. It is a number of nation states that argue together so that they can obtain the best possible advantage. Britain nearly always loses out. We go to the negotiations and we are
full of sound and fury",
but that signifies little. We nearly always leave the negotiations in a worse position and with the obligation to pay more. The EEC is not a fraternal body of harmony and light in Western Europe.
The new clause would strengthen the Minister's hand because the British Parliament would constitute a considerable force and view. If the nation felt that we were being too abrasive towards the Common Market, to use the words of the Prime Minister—that is the accusation that she made against the Government of Lord Callaghan, as he now is—it would have the opportunity to make changes at the next general election. We always claim that there is democratic accountability. That being so, why cannot the Minister accept the new clause and accept shat if the House makes judgments that those outside do not like, they are in a position to change the composition of the House? There is nothing wrong with that.
Democratic accountability provides a backstop. It ensures that we shall remain in some degree of harmony with the nations that we represent in the Chamber. It would be a backstop if the nations felt that we were being too harsh or not harsh enough. There is nothing wrong with that.
The Minister wishes to throw out the new clause, and he argues that he must have freedom to manoeuvre. That freedom means that a Conservative Minister travels to the EEC after a Cabinet decision to give way yet again. He arrives at a deal, having come under pressure from other EEC Ministers. He returns to the House and makes a statement that, for example, regulation 2891/77 will allow the Common Market to have overdraft facilities with our national funds. It is a fait accompli. The regulation does not have to be debated by the House because it is a part of Common Market legislation that is directly applicable. In that way the matter is done and dusted. Of course, there might be a debate. The matter might be raised during a debate on the European Community, when we have about 25 documents before the House, most of them about half the size of the Bible and about as incomprehensible as the Bible written in Sanskrit. It is possible that someone might drag the issue into such a debate.
We are proposing that there should be some scrutiny before the negotiations are presented to the House as an accomplished fact. It is appalling that the Minister is rejecting the proposal, but it is not unusual for Governments, following advice from civil servants, to take such a view. It is more convenient not to bother too much with the House. The previous Labour Government took much the same attitude. I thought that it was the wrong one then and I think that it is wrong now.
I genuinely believe, not simply as a point of view held while in opposition, that the Government should be more accountable. If the ideas are strong enough and can be presented satisfactorily they may convince the Committee that new clause 4 should be passed.
New Clause 4 seems to have much merit and is a test of the Government's earnestness when they claim that the position of Parliament will be retained. Clearly it has not been retained. The Minister mentioned Jacques Delors. Jacques Delors meant what he said when he claimed that 80 per cent. of all legislation will emanate from Brussels after the next 10 years. Some hon. Members may accept that, and want to make themselves redundant and subordinate themselves to some kind of parish council function. I do not.
Let me make it absolutely clear. Jacques Delors is a former chairman of the institutional affairs committee of the EEC Assembly. As such, he was a supporter of Altiero Spinelli, who was the moving figure behind the Single European Act and regarded it as a crushing blow to his aspirations of federalism for western Europe and the creation of a western European united states. That is Jacques Delors's aim and the aim of the majority of the Commissioners. It is certainly the aim of the majority of the Assembly although fortunately not of all of it. However, there is a comfortable majority.
It is up to the Government, if they are serious about retaining some power and preventing the slide towards political union—which I guess the majority of hon.

Members would reject if the issue was presented to them clearly—to show some spirit and accept proposals such as new clause 4.
The trouble is that the Government proclaim that they are not in favour of European union and she who must be obeyed by the Conservatives has already said that she does not favour it. However, she has allowed this legislation to come before the House. It has not been withdrawn. I do not know whether the Cabinet has discussed the bones of the Bill and decided that there would be no amendments and the whole Bill would be pushed through. That is the likely suspicion bearing in mind the drafting nature of the Bill. It appears likely that someone has said, "How can we draft a Bill that gives all the powers that we want to subordinate our position even further in the Common Market and is the most difficult form of words to allow amendments to be selected?"
We have a bare bones of a Bill. A new clause has been proposed by my hon. Friend the Member for Newham, South (Mr. Spearing). The Minister has an opportunity, but he has had his instructions to reject anything that modifies or changes the Bill. The Prime Minister's speech in Bruges was simply propaganda. It had no basis in truth. If there was any basis in truth in that speech, she would have given instructions to get the new clause agreed, as, indeed, the earlier new clauses should have been agreed. However, she did not do that. That is a sign that the Bruges speech is propaganda and has no basis in truth and that the country is sliding—although not inexorably—towards the European and western united states that the majority of our citizens do not seek. They accept the trading arrangements to some degree, but they do not accept the omnipotence of Brussels and nor should we.

Mr. Higgins: I presume that my right hon. Friend the Paymaster General will have given considerable thought to whether any regulations, directives or instruments relating to the operation of the decision covered by the clause will be necessary. If he has given careful thought to that, he will be able to tell the Committee whether he expects that there will be any such regulations, directives or other instruments. He could help the Committee by telling us whether that is so.

Mr. Brooke: It is necessarily the case, as emerged in the earlier dialogue, that there are issues that might arise and I cited the GNP directive as an example. In the normal course of events, there would be an opportunity for them to be debated in the House.

Mr. Spearing: Those brief exchanges have been a very useful opener to what I believe is a profound constitutional issue. If we have a Paymaster General coming to the Dispatch Box—I know why—and speaking of this "small class" of legislation when talking about money Bills, it shows the extent to which our minds have either been distorted or our perspectives skewed. The First Lord of the Treasury and the Chancellor of the Exchequer would, I believe, agree with my observations. I do not blame the Paymaster General for that slip of the tongue, but it illustrates the almost looking-glass land in which we are working.
I commend the remarks of my hon. Friend the Member for Bradford, South (Mr. Cryer) concerning European union. That is not a figment of the imagination. If right


hon. and hon. Members will read my speech in the debate before the last Division, they will find my comment that European union is not just on the cards but is with us now. It has been assented to by the Prime Minister and by the House in various international treaties. It is an objective, even though we may be reaching it slowly and reluctantly. Therefore, we must assert the powers of this House over expenditure. because we have no other powers left.
The Government may say, "We want room to manoeuvre." I heard that said before, 10 years ago, when debating this matter with my right hon. Friend the Member for Blaenau Gwent (Mr. Foot). That may apply to legislation, but can it really apply to taxation? Or should it apply to this "small class" of expenditure? Of course not, because it is final and quantitative.
The right hon. Gentleman said that the Government must have room to manoeuvre. Perhaps he is unaware that nearly three years ago, the Prime Minister said, "We do not want to change the treaties, and I am against changing the treaty of Rome." They were able to change it only by using article 236, and that had to be by unanimity. Therefore, we had foisted upon us—I am not going into the merits, although obviously it is a controversial subject—all the amendments to the treaty of Rome, encompassed in the so-called Single European Act.
The Community negotiated with us so that even the Prime Minister had to accept what the Foreign Office probably said was the best of a bad deal. If a United Kingdom Government can force a Bill through the House under a guillotine that has resulted in the Single European Act bunch of amendments, which will cause a lot of trouble, against their own express will, we can see the downside of future negotiations. I leave the Committee with those thoughts, because they are factual. Nobody can controvert them.
I did say that this was in the nature of a probing amendment. I hope that it will prove to be the short opening debate in a very long and fundamental debate that will take place not just across the Floor of the Committee but throughout the nation and in all our political parties, whatever may have been their former stance. We are talking about the ability of the House, and of the United Kingdom Government, to determine what shall happen within this country. That is an issue that we should all address with the greatest seriousness at our command. It is too late to go on now, so I beg to ask leave to withdraw the new clause.

Motion and clause, by leave, withdrawn.

Bill reported, without amendment; to be read the Third time tomorrow.

Local Government

Motion made, and Question proposed,
That an humble Address be presented to Her Majesty, praying that the Local Government (Prescribed Expenditure) (Amendment) (No. 2) Regulations 1988 (S.I., 1988, No. 1534), dated 6th September 1988, a copy of which was laid before this House on 9th September, be annulled.—[Mr. Allen McKay.]

Mr. William O'Brien: What is happening in local government is very important, and it is rather a pity that we have not the time needed to discuss such important regulations. They are intended to replace the regulations formerly made following the Secretary of State's announcement on 9 March that he intended to apply a further stranglehold to local government. This further tightening of the restrictions was to amend the definition of prescribed capital expenditure. When the Secretary of State foolishly made that statement on 9 March he had no idea what he was doing or what was going on, and it is because we in the Labour party realise that the Secretary of State lacks a sense of judgment that I support the motion tonight.
The Secretary of State's lack of judgment was made clear in his admission to the House on 25 April, when he said:
I did not know what was going on".—[Official Report, 25 April 1988; Vol. 132, c. 105.]
Yet well before 9 March, agreements were made between local authorities and the private sector, taking place with the advice and guidance of the Department of the Environment. It is also clear following his statement on 25 April that the Secretary of State took his action on 9 March without realising the full implications of his action for the position of local authorities.
Too often the House is subjected to Dispatch Box policies when major changes are made in some announcement from the Dispatch Box. On the occasion of the 9 March statement, those major changes put in jeopardy local authorities' capital investment throughout the country. Capital schemes involving the private sector were to provide houses and sheltered accommodation for the elderly, badly needed leisure centres in the communities, town and city redevelopments, harbour improvements and the dredging of docks, the building of marinas—particularly by coastal towns—the building of car parks and arrangements with housing associations to build houses and bungalows for the elderly. There were also plans by local authorities to provide extra accommodation for the staff needed to apply the poll tax next year.
There was no doubt in the minds of those who defended local government that those were the kind of schemes being programmed by the vast majority of local authorities. It is significant to note what happened following the Secretary of State's backdown, when he had to admit on 25 April that he had made a "cock-up" of his ill-considered statement. He did not know what was going on: that is what he told the House. Because of the devastating circumstances involving hundreds of local authorities, he agreed to consider the capital schemes that were in the process of going forward, so that he could issue

further capital allowances. Suffice to say that over 400 applications have been received by the Department, just over half of which have been acted upon.
I ask the Minister to inform the House how many applications for additional capital allowance have been made to the Department, and how many of those have been agreed. It would be of interest to local authorities and to the House to know the total number of additional allocations made and the criteria which he has adopted in considering those further bids. We must know in which order the Department is dealing with the requests for additional capital allocations. Is there an order and, if so, is it alphabetical or is it based on the date of application? That must be answered, as some schemes were well advanced before 9 March, but were caught up in the new policies announced by the Secretary of State. We demand to know how and in what order those delayed schemes are being considered by the Secretary of State.
I shall give an illustration. The scheme planned by the Wakefield metropolitan district council for the development of the Castleford town centre has been in the pipeline for six or seven years. A series of obstacles had to be overcome by that authority, including compulsory purchase orders, the application to the Secretary of State for the urban development grant and the acquisition by the council of the freehold on the new development in exchange for the old part of the town to the developers.

Mr. Geoffrey Lofthouse: Is my hon. Friend aware that the request for the urban development grant for Castleford town centre and the Pontefract development has now been on the Minister's desk for about two years? In that area £4 million a week have been taken away from local people's spending power since the miners' strike and the local business people have had a traumatic experience. Now, local businesses are about to close and become bankrupt, purely because they cannot go any further with the development scheme until they know whether they have obtained the urban development grant.

Mr. O'Brien: My hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse) is correct to support the point I have made, because the Secretary of State has been involved with that planned inner-town development for some time. He has been responsible for delays before and since 9 March. When will the people of Castleford be allowed to see their town centre improved and developed? I hope that the Secretary of State will address his remarks to that question. What number does that development rank in the 450 or so applications before the Secretary of State? What considerations must be undertaken before the additional capital allowance is made? We would like some answers to those serious questions.
The Wakefield metropolitan district council is also waiting for a decision on the Headlands development in the centre of Pontefract. Again, that programme was in the pipeline well before 9 March. That involves a commercial development by a private developer in partnership with the local authority and involves the building of a new school for the Church of England, substantial improvements to roads and car parking and a general inner-town redevelopment. All those proposals are in line with Government policies, but they were dramatically stopped by the Secretary of State, and one has to ask why.
There are many other schemes at risk, because of the inadequate decision of the Secretary of State and the uncertainties following his promise to consider further capital allocations for schemes submitted by local authorities. Newcastle is waiting for a decision on the provision of a multi-storey car park that involves sector finance. Westminster is waiting for a decision on a multi-million pound scheme to replace depot facilities, to renovate and repair two large housing estates and to replace a Victorian hostel for homeless men. All those plans involve private sector finance.
Greenwich has arrangements with a housing association to build 300 homes to accommodate some of the 15,000 households that are on its waiting list. Lewisham is planning a two-hall extension to accommodate the additional staff needed to implement the poll tax and the necessary additional education staff required after the abolition of the Inner London education authority. Doncaster has plans to provide offices for an additional 100 staff needed to administer the poll tax.
The Secretary of State promised that there would be consultation with the local authorities about the Government's earlier proposals, after which the new regulations would be introduced. What was the form of those consultations? If the new regulations are those now before the House, they will do nothing to help local government. They do little more than clarify the uncertainties of the earlier regulations and do not address the concerns of local government.
During the consultations, the Association of Metropolitan authorities made it clear that the proposals will result in a reduction in private sector investment in inner-city areas. Lease and leaseback schemes have been the favoured means of encouraging joint venture projects between local authorities and private developers. Such schemes have, in the main, been accepted by the Secretary of State. They are not at risk. I hope that the Minister will explain what came out of the negotiations. It would appear that no meaningful discussions took place.
Local authorities have made it clear that the implementation of the poll tax will mean that more offices will be needed to accommodate additional staff. They have stated that to reduce leasing arrangements on buildings from 20 years to three years will have a devastating effect on their ability to provide such offices. It is also clear that the additional allowance of £25 million in 1988–89 is far from adequate to compensate for the change in the regulations. How did the Government arrive at that figure? We have a maze of regulations before us that are extremely complex and difficult to interpret. We believe that the regulations provide the background to the Government's intention to change the capital control system for England and Wales in 1990–91.
Does the Minister confirm that the consultation paper, "Capital expenditure and Finance" published in July, has particular relevance to the regulations? Does he accept that the new system of regulations will enable the Secretary of State to exercise stricter controls on borrowing and expenditure through annual credit approvals?
The explanatory note on the regulations before us refers to capital receipts. Is it the Government's intention to restrict local authority use of capital receipts? At present local authorities can use all their capital receipts to finance additional expenditure. Do the Government intend to

restrict local authorities' use of capital receipts for housing and other projects, arising from the July consultation paper?
Finally, will there be any new method of debt repayment by local authorities? Is the Minister aware that the new proposals in the July circular will add £800 million to local authority costs in the first year of a 100 per cent. increase to the latest poll tax figures issued by the Government?
In view of the mismatch of these regulations and the fact that there is little change from the previous regulations, I ask the Minister to withdraw paper No. 1534.

Mr. Matthew Taylor: The Social and Liberal Democrats are opposed to the statutory instrument and support the prayer against it. It must be recognised that many local authorities have been forced into some form of creative accounting because of the Government's system of capital controls. We accept, and have always accepted, that there must he a top limit on borrowing, but Government policy is too unfair and too impractical, particularly in this statutory instrument. I shall focus on the role of private enterprise, which is apparently close to the hearts of Tory Members.

Mr. Robert G. Hughes: rose—

Mr. Taylor: The hon. Gentleman should allow me to elaborate. [HON. MEMBERS: "Give way."] I shall not give way, so the hon. Gentleman can sit down and bide his time. He can hear what I have to say before he comes back and he might find it instructive.
In the 1987 manifesto, the Conservatives said:
For the sake of those living in our inner cities we must remove the barriers against private investment.
Many authorities see this prescribed expenditure amendment as just such a barrier to private investment because many authorities have undoubtedly kept to the required principles on capital expenditure, but believe that the best service for local people will result from leaseback deals with commercial companies. In that sense we are tonight debating a prime example of Conservative party double-speak, welcoming the combined efforts of private enterprise and local government on the one hand and blocking it on the other.
The Association of Metropolitan Authorities is concerned that the proposals will result in a reduction in private sector investment in inner-city areas. What assurances can the Minister give that that is not the case? The Royal Institution of Chartered Surveyors is
concerned that a whole range of perfectly legitimate transactions could be adversely affected. Similar transactions have been a staple element of efficient property management for many years and it is important that they should not be needlessly hindered.
It also states:
Restrictions on leasing arrangements will also have a highly adverse effect on the leasing market and investment market generally.
The Audit Commission has advised the Government that in the interests of sound estate management and to enable authorities to rationalise their property holdings. capital expenditure controls should be relaxed. It would be interesting to hear from the Minister by what means he encourages such joint venture projects between local authorities and private developers.
As a result of these new regulations many worthwhile projects have been abandoned, despite local authorities, with the private sector, undertaking the sort of enterprises that the Government say they want authorities to do. My first example concerns an excellent project to alleviate the housing crisis in Tower Hamlets. Some families have to stay in bed-and-breakfast accommodation for as long as three or four years because of the shortage of housing stock. In an effort to alleviate this, Tower Hamlets combined with private finance to provide temporary accommodation outside the borough. It would have involved a total of 2,400 people. That project has now had to be abandoned.
In Tower Hamlets, a project for 800 homes for shared ownership schemes over three years and 300 to 400 ordinary rented homes for people in Tower Hamlets provides another example. The sites were to be sold to housing associations in Globe Town. The project has now been abandoned. Both examples were genuine and enterprising ways of raising private capital to cope with the crisis of homelessness in the inner city. Both were cancelled by a Conservative Government who claim private enterprise as their own—

Mr. Robert G. Hughes: Were those the plans that the Liberal council had to abandon because they were racist?

Mr. Taylor: It would be hard to describe as racist providing people with accommodation, thereby allowing them to leave bed-and-breakfast accommodation. It is hard to describe as racist giving people the chance to own their homes—a chance that is not available to them now. That was all to be done with the aid of private enterprise in a way that the hon. Gentleman and Government Front Bench spokesmen would support.
Whatever local authorities do to comply with the new regulations, their efforts to encourage private enterprise are being undermined and thwarted by the Department of the Environment and its Ministers. Apart from the regulations, the DoE has another failure to account for: its incompetence and inability to deal with the huge amounts of direction and control it has taken on itself have resulted in delays which are also causing projects not to happen.
The last time this subject was debated in this place, my hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) mentioned a scheme in Tower Hamlets which was effectively outlawed in February 1987. On 13 February of that year, Tower Hamlets wrote seeking an exemption, and, apart from the odd holding letter from the Department, having chased the application and sent a delegation, the council had waited for 14 months for a response from the DoE by the time my hon. Friend spoke. During the previous debate, the Under-Secretary of State agreed to look into the matter. I checked with Tower Hamlets today; it has still heard nothing. The council has now been waiting for 20 months for action from the Department.
This is a scheme that would house between 300 and 400 people and would save the council £7 million in bed-and-breakfast payments, yet the Government are either sitting on their backsides unwilling to act, or they cannot cope—I suspect the latter explanation is the true

one—because they are so determined to control everything councils do that they cannot do the job they have set themselves.
My local authority, Carrick, as a result of stopping barter and leaseback schemes, had to revise its proposals for Truro city hall. The council made every effort to comply with the new regulations. After a meeting with the Minister we sent in the application on 9 July, the closing date for applying for an exemption. We heard nothing. In late August, the council chased up the application, only to be told that the DoE had never received it. Naturally, the council immediately sent a duplicate copy, but even as it was sent off, the council received a note from the DoE acknowledging the earlier application that had supposedly never been received.
The application had not even been processed within a reasonable time. Now my council is awaiting approval of an application made in July which will clearly fall, not by being ruled out by Government regulations, but because the Government can no longer process the applications for all the things they have decided to assume control of. I am sure there are many more examples of that. The hon. Member for Normanton (Mr. O'Brien) listed a large number of them.
The Government's actions are ill thought out and ill judged, and will wreck the ability of properly elected local government bodies which are determined to serve local residents and meet the needs that they elect them to meet. The Government are stopping them fulfilling those functions. No private company could operate like this, or be expected to put up with these sorts of delays. It would knock on the door of local government claiming back the expenses it had been put to. I remind Conservative Members that most of these schemes involve reputable sources of finance—building societies, housing associations and even large developers such as Barratt. It is not a stop on the lunatic Left. It is a stop that is immediately affecting sensible councils across the country—

Mr. Patrick McLoughlin: rose—

Mr. Taylor: If the hon. Gentleman wishes to defend that, of course I shall give way.

Mr. McLoughlin: On behalf of his party—whichever one he speaks for tonight—will the hon. Gentleman say whether it is his intention to have no controls on local government? Would he allow all local authorities, regardless of how reckless, stupid and idiotic they may be, to carry on with their policies and expect the Government of the day to take no action? Is that the policy that he is advocating?

Mr. Taylor: The hon. Gentleman may recall that I opened my remarks by saying that we need some controls, but not these. I remind the hon. Gentleman that the Department of the Environment issued a circular listing the councils that were involved in lease and leaseback deals which was so inaccurate, poorly judged and misinformed that on 14 April the Department had to write to the office of my hon. Friend the Member for Southwark and Bermondsey to disassociate itself from the justifications for its actions. It was not thought through properly then, and it still has not been thought through. The Government would do better to withdraw the ban now and admit that they got it wrong than to pursue it further.

Mr. Harry Cohen: The regulations relate to the statement made by the Secretary of State for the Environment on 9 March that made all leaseback arrangements illegal. After he had finished making his statement, at about five o'clock, I quickly faxed the statement to the borough treasurer in my area—at a cost of £20 to myself—because I knew that housing projects in my borough would be affected, as would the opportunity to effect vital housing improvements. But it was impossible to avoid the block, which was to apply from midnight that day. It is a ridiculous way to govern—to announce the block in the House and to implement it from midnight without consultation. It was a scandal.
The ban scuppered the plans of local authorities to build thousands of homes, especially in London where many people are homeless and low paid and many families live in bed-and-breakfast accommodation. The ban was especially savage in London, because thousands of new homes were under consideration with the private sector under the leaseback arrangements. It was impossible for the local authority to change over to doing the job without leasing because property values in London are so high. It caused a severe problem.
Projects in my borough were affected, including the site of Leytonstone football ground, where 32 houses were to be built. They had been purchased by the Samuel Lewis housing trust, which was financed by City merchant bankers, and were to be leased back to the council for homeless families. Half had already been built and 10 homes handed over, but £1·5 million had to be paid. The local authority had no alternative but to continue funding the project and to find £1·5 million out of its other important housing projects. That was equivalent to a cut in its housing budget overnight.
At Cogan avenue in Walthamstow, 161 dwellings on council land had been sold—that is what the Government want councils to do—to London and Quadrant housing trust. The accommodation was built with privately raised finance and then leased to the council for occupation by homeless families. Without the financial security of leaseback, the 120 homes on that site cannot be built.
At Larkswood mews in Chingford, 46 dwellings have been built by Barratt and purchased by the East London housing association with private finance. They were to be leased to the council for 20 years for homeless families. Those homes have now been completed, but, because of the block, the residents can stay there for only 11 months. In effect, that site is now being used as a giant hostel. Families will be upset when they have to move. It is crazy that 46 homes with gardens are being used as a hostel. It is wrong that the council has to foot the bill for that as well as face all those problems.
I should like to make another brief point, which is that leaseback could have been used for bringing forward a scheme relating to the large-panel construction estates which are dilapidated and have structural problems, so that those estates could be put on the agenda and dealt with. Such schemes have been blocked although they offered important opportunities for the refurbishment and redevelopment of low-rise properties which would have improved the environment. It is tragic that such schemes have been blocked and it is wrong that the Government have not come up with an alternative.
The Government should stop and think again about the regulations. They should stop putting blocks on councils which are trying to address their serious local housing needs, especially when they are trying to combine with the private sector deal with a desperate housing crisis.

The Minister for Local Government (Mr. John Selwyn Gummer): We should be careful about what we are debating. We are discussing the movement from a series of short-term measures to permanent provisions. We are doing so not because we want to stop councils doing things which are valuable and not because we want to stop people going forward with capital investment, but because we want to stop people going forward with capital investment under spurious schemes.
Any Government—one of the party of the hon. Member for Leyton (Mr. Cohen) just as much as this Government—must take into account spending by local authorities. We must all have rules under which local authorities make their spending decisions. In the past, local authorities have been prepared to keep to sensible rules without too much trouble and have accepted that there are certain means of financing which are obviously nonsense and which no sensible local authority would follow.
Local authorities have started to do such things only because they have decided that it is they who will decide what the national economy should be; they who will decide what they will take from the general cake; and they who will decide what the nation owes them. But that is the Government's job. It is the Government who must decide the amount of resources available and how they should be shared out. It is obviously unfair on local authorities with high standards if they find, that some local authorities use means of increasing their allocation to their own good, but to the detriment of others.
Therefore, all that we sought to do was exclude the kind of operation that enabled local authorities to lease their own town hall and then use the money to get round the capital arrangements—the kind of operation that was clearly designed to use techniques of leaseback, riot for any sensible economic purpose but to avoid the perfectly reasonable capital spending controls that all Governments must have and which any economic policy necessitates.
The economic policy that has necessitated those capital spending controls has proved to be successful year after year. It is the economic policy which has brought down unemployment so notably, which has made us the fastest growing economy among our neighbours, which is crucial to the development of this nation and which has put Britain back where it ought to be, instead of in the slough of despond that it was in when we came to power. Therefore, it is important to defend that economic policy.
It is reasonable for the hon. Member for Normanton (Mr. O'Brien) to say that there are many things that we should like to do, but the question is whether it is reasonable for particular authorities to use financial stratagems to do things that other authorities are unable to do because they keep to the spirit of the rules. I say honestly to him that it is sad that most of the local government legislation that the Government have had to bring forward would not have had to be introduced if local authorities had obeyed the spirit of the rules instead of trying constantly to find a sneaky way round them.
It is sad that a small number of local authorities have brought the great business of local government into disrepute by using stratagems that their forefathers would not have dreamt of using, because they would have seen those techniques as beneath them, and not the sort of thing that anybody with civic pride would use. Therefore, I say to the hon. Gentleman that one has to be careful.
The hon. Gentleman gave us a list of things with which he suggested we should concern ourselves. Many were ones that we should have liked to see. I am happy to say to the hon. Member for Pontefract and Castleford (Mr. Lofthouse) that, on the proposal for Castleford town centre, which is an urban development grant scheme and associated with an "in-and-out—pipeline" application, the local authority was asked for additional information, which we received on Friday. We shall process it as rapidly as possible.
The hon. Member for Normanton should be careful with his list. He mentioned the disgraceful fact that Lewisham town hall has not been able to go ahead with its development and extension. It is true that we have had an application from the chief executive, but in his letter he admitted that the full council had voted against the scheme. Half the Labour party came down on one side and half on the other. It is difficult for us to approve an application for an allocation for a scheme that the council apparently does not support. It is a bit hard to complain that the Government are responsible for the obvious dislocation in Lewisham town hall.
At the moment we have two sets of "pipeline" and "in-and-out" schemes, as the hon. Member for Normanton knows. A large number of schemes have been proposed, many right at the last moment, so he will understand that some are still under consideration. Under the pipeline scheme we have determined 102 applications, of which 45 have been approved and 57 refused. Among those approvals are some applications that were not necessary. On the "in-and-out" scheme, 72 applications have been determined— 32 were approved or the application was unnecessary and 40 were rejected. It is reasonable to say that of the 437 schemes put to us, we have already determined 174.
We are dealing with applications broadly in order of date of receipt, but we pull out cases where there is a specific need to try to pass them more quickly because of a tender date, and so on. I assure the hon. Member for Normanton that if he gets in touch with me, I shall do my best to get through the special schemes that he wants. I should be happy to answer any questions that he wants to raise with me. I am open to consider any case where he feels that I should hurry things on because of a special reason.
If the hon. Member for Truro (Mr. Taylor) looks more closely at some of his proposals, he will see that Tower Hamlets was trying to avoid the perfectly reasonable capital controls, but it did not need to, because Tower Hamlets has 2,526 vacant dwellings. If the local authority got on with a sensible letting policy, it would not have this problem. We all know that the problem in Tower Hamlets

is that it is probably unlikely that the local authority knows that it has that number of vacant dwellings. There is a difficulty there in trying to solve the problem. It would be helpful if the hon. Gentleman went to his friends in Tower Hamlets to see whether he could do something to help the local authority solve its problems rather than blaming the Government.
I assure the hon. Gentleman that we are looking at the pipeline application for Truro which involves the barter of a car park for refurbishment of the town hall. It is not the top application on the list, but when we come to it we shall do our best.
The problem with the case put by the hon. Member for Leyton (Mr. Cohen) is not that the things Leyton wants to do are awful or that they would not help people. Many of them would be helpful, but the problem is that Leyton wants to do them by avoiding its fair share of the arrangements which help councils over the country as a whole. It is not on to say, "We have found a quick and easy way round it, even if it is with a private developer, and we expect the Government to let us go ahead with a scheme that will do somebody else out of money," nor is it right to spend too much money in local government in order to hit the Government's economic strategy.
I hope that the House will accept that the regulations are reasonable and will enable us to share fairly among councils that which is available and will stop people doing things that their ancestors would never have dreamt of trying.

Question put and negatived.

PETITION

West Lodge Schools

Mr. Robert G. Hughes: I have a petition from 793 parents, children, staff and friends of the West Lodge first and middle schools in Pinner. Each school is expanding from two to three-form entry and will each be taking in 360 children by 1992. At present, they have permanent capacity for only 280 and 260 children respectively. Extra but temporary accommodation is being provided by the use of mobiles and rooms in an adjacent semi-derelict dairy.
The petitioners wish to secure the erection of purpose-built accommodation. The semi-derelict dairy is unsuitable and the temporary buildings encroach on play areas that are already 2,000 sq ft below the level recommended by the Education (School Premises) Regulations 1981. The local authority has drawn up a feasibility study for a new wing to provides each school with the necessary three extra classrooms, but Harrow cannot adopt it without authorisation for capital expenditure from the Department of Education and Science.
My constituents ask that the Secretary of State for Education and Science authorises capital expenditure in 1988–89 for the London borough of Harrow to undertake the building project at the West Lodge schools.

To lie upon the Table.

Major Peter Cory

Motion made, and Question proposed, That the House do now adjourn.—[Mr. Durant.]

Mr. Andrew Hunter: This is the second Adjournment debate dealing with the case of Major Peter Cory, the first being held nearly 25 years ago, on 30 June 1964. By any criteria of judgment, the case of Major Cory is quite remarkable. Hopefully, it is unique and will remain so.
It is a case that will not go away, nor should it be allowed to go away. It is about an injustice, a miscarriage of justice, which not only has yet to be put right but which, as I discovered only a few months ago, has been compounded over the years by the Ministry of Defence. There is now a second dimension to the case of Major Peter Cory.
In 1961, Major Cory was charged with operating dishonestly the president of the regimental institute's fund of 60 Company Royal Army Service Corps, which he commanded, and which was then stationed in Kenya. In due course he was sentenced by court martial to the heavy term of one year's imprisonment. A shameful series of events resulted in him serving his sentence before his appeal was heard by the court martial appeal court. In a scathing judgment, the appeal court totally exonerated Major Cory, pronounced him innocent of all charges and declared him to be the victim of a miscarriage of justice. Major Cory later received some financial compensation.
The case caused grave concern in Parliament. The then Secretary of State for War, the late James Ramsden, presided over a War Office inquiry. It is a remarkable and unacceptable feature of that inquiry that neither Major Cory nor his legal advisers were called to give evidence, although his advisers were told to be prepared to do so. The Secretay of State's lengthy statement on the findings of the inquiry is to be found in Hansard, 17 December 1963, columns 1049–59. The Secretary of State was questioned the following day, 18 December, at columns 1249 to 1259.
The case of Major Peter Cory did not end there, as perhaps the War Office hoped. The Member of Parliament for Basingstoke at that time, Mr. Denzil Freeth, raised it in Adjournment debate of 30 June 1964, at columns 1310 to 1320. Over a period of nearly a quarter of a century, nine written complaints have been submitted to the Minister of Defence by Major Cory, by his legal advisers, and by three successive Members of Parliament for Basingstoke—Mr. Denzil Freeth, my hon. Friend the Member for Hampshire, North-West (Sir D. Mitchell) and myself.
The case of Major Cory did not end in 1963 because so many people who have studied it believe that Major Cory remains the victim of a miscarriage of justice. The essential argument is that, although the miscarriage of justice that Major Cory suffered was acknowledged by the courts martial appeal court in April 1963, that miscarriage of justice has been perpetuated, primarily by the demonstrable, irrefutable and culpable inaccuracies made to the House of Commons by the late James Ramsden. I refer to the Official Report for 17 December 1963, columns 1949 to 1959. I have studied the statement and the whole of Major Cory's case for more than four years. Along with others who have done this, I have concluded that Major Cory will

not be, and cannot be, fully vindicated as a result of the miscarriage of justice that he suffered unless or until the Ministry of Defence acknowledges and accepts the inaccuracies of the statement made to the House by the late James Ramsden.
One of the reasons why, 25 years ago, the inquiry was convened was, to quote from a letter that the Minister of Defence wrote to Major Cory,
to supply Parliament with a true history of the case'".
That has not yet happened. For 25 years, Major Cory and his advisers have pleaded with the Ministry of Defence. For 25 years, the Minister of Defence has resisted. It is abundantly clear that Ramsden did not supply Parliament with sufficient facts for the true history of the case to be understood, and that at key points his statement is irreconcilable with the judgment of the courts martial appeal court, which exonerated Major Cory. It is abundantly clear that the Secretary of State presented as fact what the appeal court had demonstrated to be false, and that he denied what the appeal court had established to be true. Major Cory appears in a less favourable light because of it.
Ramsden told the House of Commons:
The searches made both by the prosecution and defence after the trial failed to produce any … material documents.
Yet, pivotal to the appeal court's exoneration of Major Cory was nothing other than the discovery of material documents. It is said in the judgment:
Some … discovered alter the close of the Summary of Evidence … others … were found after the trial had concluded.
One cannot have it both ways.
Referring to the 15th charge which, as my hon. Friend the Minister will be aware, was one of theft of £47 9s, which, during the court martial, the prosecution claimed to be the cornerstone of the case against Major Cory, Ramsden told the House of Commons:
The respondents, in the course of the hearing … did not seek to sustain the conviction on this charge".—[Official Report, 17 December 1963; Vol. 686, c. 1054–6.]
That is not so. The 15th charge was withdrawn long before the appeal court hearing, since the prosecution was unable to substantiate that charge. What Ramsden should have done in this very Chamber was to explain how the War Office confirmed a conviction and a prison sentence on the prime charge, knowing full well that it was unable to substantiate the charge.
The inquiry was also convened to present to Parliament
a considered conclusion on the handling of the case by the legal and military personnel involved".
Again, I quote from a letter that the Ministry of Defence wrote to Major Cory. Ramsden's statement came to no such conclusion. It contains no reference to the stinging rebuke and condemnation to be found in the appeal court judgment and, once again, Major Cory appears in a less favourable light because of it.
Time and again over 25 years, detailed arguments have been presented to the Ministry of Defence. The files must be enormous. It cannot, with any intellectual honesty, be denied that Ramsden omitted many crucial factors in his presentation of the case. It cannot be denied that his statement neither accurately reflects nor recalls the criticisms made by the appeal court, nor that it contradicts the judgment. The statement contains no fewer than 23 errors of fact as established by the court martial and the appeal court. The individual significance of those


inaccuracies varies considerably, but their collective significance is to deny Parliament a true record of the case. That was the primary purpose of the inquiry.
In his reply of 26 May to a written question that I tabled, my hon. Friend the Under-Secretary acknowledged that Ramsden
made certain omissions in his statement",
but my hon. Friend would also have us accept that that
these were made in the interests of brevity".
He would also have us accept that the statement
should not be taken to contradict or minimise Major Cory's complete exoneration by the courts-martial appeal court's judgment".
I must tell my hon. Friend quite bluntly and frankly that neither Major Cory, nor his legal advisers, nor myself, will accept what my hon. Friend asks us to accept.
Now comes the second dimension to the case of Major Peter Cory. In January this year, Major Cory had occasion to believe that a situation almost beyond belief prevailed. I corresponded with the Home Office and tabled two written questions. The truth was soon revealed. Despite national interest in the case at the time, exoneration by the appeal court, a War Office inquiry, the grave concern expressed in Parliament and 25 years of relentless campaigning by Major Cory and his advisers, the legal department of the Ministry of Defence—or, as it was at the beginning, the War Office—had failed to notify the national identification bureau that Major Cory's conviction had been quashed on appeal. For 25 years my constituent, Major Peter Cory, had been labelled as a criminal and he was not a criminal. I appreciate my hon. Friend's frankness in this and, in his answer of 26 May to my written question, he said:
I regret that due to an administrative error by the MoD Major Cory's name was not removed from the records"—[Official Report, 26 May 1988; Vol. 134, c. 325–6.]
How truly remarkable is the letter written to Major Cory's solicitors by the Ministry of Defence on 7 October this year. When the Minister had already accepted the Ministry of Defence's responsibility, how truly remarkable that a Ministry official should ask Major Cory's solicitors:
Who do you consider responsible for advising the Bureau of the quashing of the conviction?
After all that has been said and done over 25 years, can it be that the MOD needs to inquire of Major Cory what the conviction was for, where it was recorded and when? Such a letter does little to command confidence in the MOD legal department. It is too indicative of MOD's long-standing treatment of Major Cory. The original injustice that Major Cory suffered has been compounded by this revelation. There is a disgraceful consistency in what many would describe as MOD's callous disregard for and treatment of Major Cory. From first to last, the MOD has found him a nuisance and an embarrassment. He has been an inconvenience to the system. It is not good enough for my hon. Friend to
regret that due to an administrative error by the MoD Major Cory's name was not removed from the records".—[Official Report, 26 May 1988; vol. 134, c., 326.]
It is not good enough for a Home Office Minister to ask me to pass on to Major Cory apologies for the
inconvenience which he has suffered as a result of the records of NIB being incorrect.
Major Cory has not suffered an inconvenience; he has endured a ruined life. Responsibility for this starts and finishes with the MOD and the War Office before it.

Enough is enough. Although with the passing of time it may be thought that the events and concerns of 25 years ago are of decreasing importance and significance, justice is timeless. If evil men can be punished for what they did in a war which ended more than 40 years ago, why cannot a good man receive, after 25 years, that full, complete and total exoneration which he so justly deserves? My hon. Friend alone can answer that question since the power and the responsibility to do so is his. A miscarriage of justice of a quarter of a century ago has been perpetuated by the MOD. The time has come to call a halt to it.
Major Cory has suffered immeasurably at the hands of the MOD. Indisputably, the Ministry has a moral obligation, and arguably a legal obligation, to put an end to a wretched saga. A positive response is called for.

The Parliamentary Under-Secretary of State for the Armed Forces (Mr. Roger Freeman): I congratulate my hon. Friend the Member for Basingstoke (Mr. Hunter) on securing this Adjournment debate. I pay tribute to him for the considerable interest that he has shown in the case of Major Cory over the years and the support that he has clearly given to his constituent.
I am sure that Major Cory is most appreciative of all the efforts that have been made over the past years in support of his interests. This is a sad case and little credit reflects on many of the parties involved, both originally and in the intervening years. I shall seek to respond to the arguments which have been advanced and give my hon. Friend the assurances that he is seeking.
Before dealing with the specific matters that have been raised by my hon. Friend the Member for Basingstoke, I shall set out briefly a summary of the history of the case that he has raised.
Major Peter Cory RASC commanded 60 Company, Royal Army Service Corps from its formation in England in July 1958 until December 1960. The company was a unit of 24 Infantry Brigade Group based in Kenya. Throughout his period of command, Major Cory personally operated the president of the regimental institute's fund. These were non-public moneys that were used for the welfare of the unit in providing small additional amenities, such as sports equipment. Queen's regulations prescribe that these accounts should be audited at regular intervals, but unfortunately this was not done in accordance with the laid-down procedures.
Major Cory left the company on 17 December 1960 to return to the United Kingdom on 21 December 1960. In November 1960, he had appointed a board of officers to carry out an overall audit of unit funds and accounts as part of the handover of the unit to his successor. That board could not complete its task in respect of the president of the regimental institute's fund, because the quarter ending 30 September had not been audited.
On 15 December, two officers of the company appointed by Major Cory began the audit of the accounts for the July to September quarter. My hon. Friend will agree that there is nothing to be gained by going into the detailed account of the various audits that followed, but the accounts were found to be in a very confused state and a cash deficiency was found of £82 15s 7d. In early 1961, Major Cory's attention was drawn to the deficiency and he was asked to meet it. His reply sought to explain it, but was not considered satisfactory.
There were grounds to suspect that the account had not been run properly, and on 6 May 1961 Major Cory was asked to return to Kenya. On 16 May, he was put on a holding charge and placed under arrest. It was unfortunate that Major Cory was not asked to provide an explanation before being arrested, but at the time it was believed that there were valid grounds for concluding that the account had been operated dishonestly. On 25 September 1961 Major Cory was arraigned before a general courts martial in Nairobi on charges relating to the PRI account. The trial lasted for 43 days. There were a number of reasons for its length, but it should have taken far less time and the result was a heavy burden on all taking part.

Mr. Hunter: My hon. Friend the Minister errs in one respect. He does not draw attention to the letter from Lieutenant-Colonel Ackers which draws attention to the fact that there was no deficiency in the PRI account. I hope that my hon. Friend and his advisers will note that. There was no such deficiency, as was acknowledged by the appeal court in due course.

Mr. Freeman: I acknowledge what my hon. Friend has said. On appeal, the original charges were quashed.
Major Cory was convicted of seven of the charges and sentenced to be cashiered—the modern equivalent of being dismissed with disgrace—and two years' imprisonment. As two of the findings of guilt were not confirmed, the confirming officer also reduced the term of imprisonment to one year.
Major Cory completed his sentence and was discharged from prison on 24 July 1962. His appeal was heard by the courts martial appeal court on 9 April 1963 when the court quashed all the convictions and made a number of extremely critical observations on the case. As a result of the quashing of Major Cory's convictions, his Army pay and allowances were restored. On 7 May 1963 he applied to retire voluntarily and that was approved with effect from 1 August 1963. He was given retired pay and a terminal grant. In addition to his back pay and allowances an ex-gratia payment of £7,500 was authorised in consideration of the hardship caused by his conviction. That amounted to three to four years' pay. The amount was arrived at on the advice of one of the official referees of the Supreme Court acting as an independent assessor.
That is a summary of at least some of the facts in this very sad case. Regrettably there were errors, but when the courts martial appeal court quashed Major Cory's conviction, it completely vindicated him. I have already assured my hon. Friend, and I repeat, that that was a complete vindication of Major Cory. So far as the Ministry of Defence is concerned, leaving aside the errors that undoubtedly were committed, that was a complete vindication.
I know that Major Cory feels that that was not the case; in other words, that he was not vindicated. My hon. Friend and other hon. Members have taken up his case and we have corresponded regularly over the past two years on various aspects. The subject was raised in the House before. On 17 December 1963 the then Secretary of State for War, Mr. James Ramsden, made a statement informing the House of the outcome of inquiries undertaken by the Lord Chancellor and himself into the circumstances of the court martial of Major Cory and the subsequent events up to the hearing of the courts martial appeal court.
My hon. Friend has referred to that statement tonight and to the fact that Major Cory felt that it contained a number of omissions and inaccuracies and statements that were open to misinterpretation. 1 want to make it quite clear that the statement was the outcome of the inquiries undertaken by the Lord Chancellor and the Secretary of State for War. Its purpose was to supply a history of Major Cory's case with the particular criticisms made by the courts martial appeal court, and to give the considered conclusions of the then Lord Chancellor and Secretary of State for War on the handling of Major Cory's case by the legal and military personnel involved and on any bearing it might have on the then current legal position in the Army. It was not intended as a further public vindication of Major Cory's conduct and character. Perhaps it should have been, but in fact it was not.
My hon. Friend mentioned the concern that Major Cory was not personally involved in the investigation. However, the investigation included interviews with the lawyer who defended Major Cory at the trial as well as —exceptionally, I understand—with the president and members of the court. As I have said that the purpose of the investigation was aimed at internal procedural irregularities and certainly not to serve as a rerun of the original trial, there was no reason for Major Cory's involvement.
I give my hon. Friend the assurance that the Ministry of Defence is ready to receive further representations from Major Cory's legal advisers concerning the accuracy of Mr. Ramsden's statement of 1963. I understand that Major Cory believes that Mr. Ramsden's statement contained inaccuracies and can provide evidence that has so far not been considered. We shall gibe those representations fair and thorough review.
I wish to make it clear that, if any statements were made to the House that were open to misrepresentation, or if any facts were omitted in the interests of brevity, there was no intention to mislead—and the statement should not be taken to contradict or minimise Major Cory's complete exoneration by the courts martial appeal court's judgment. Major Cory is innocent of all the charges.
That leads me to a regrettable error made in this case that came to light very recently. Owing to an oversight by my Department in 1963, the national identification bureau was not informed after the courts martial appeal court hearing that the convictions had been quashed. The convictions remained on the record of the national identification bureau. I have taken steps to ensure that the national identification bureau's records are now correct, and I understand that it has written to Major Cory confirming that.
In view of that unfortunate error, I have instructed Ministry of Defence officials to re-examine the procedure for notifying courts martial convictions to the national identification bureau, and to devise a system that will prevent a wrong conviction being recorded in the NIB computer, or a conviction not being erased because a reviewing authority has quashed a finding or sentence. I appreciate that that in no way undoes the wrong that has been done, but perhaps my hon. Friend will join me in believing that at least we have taken steps to ensure that such a regrettable error does not happen again. That has now been done, and Queen's Regulations for the Army 1975 are being amended to reflect the changes in procedure. All reviewing authorities have been issued with instructions reinforcing the amendments.
My hon. Friend mentioned also the question of compensation. I understand that there has been preliminary correspondence between Major Cory's legal advisers and officials of my Department about the possibility of a claim, but that no details of that claim have yet been made available. My hon. Friend referred to a letter dated 7 October. That came from the Ministry of Defence claims department, and I understand that it was seeking preliminary information about that potential claim. It was not intended in any way as a slight or criticism. I understand that it was designed, at a very early stage in these proceedings, to extract information.
I am sure that my hon. Friend will agree that, in the circumstances, it would be inappropriate for me to comment further on the matter at this stage. If we are to enter legal proceedings concerning any potential claim, it will probably be better to allow the normal procedures to run their course.

Sir Antony Buck: As it appears that an ex gratia payment, as it were, has already been made, and as later errors have now been revealed by my right hon. Friend the Minister of Defence, it is clear that there should be reconsideration of the amount that has been paid. I would not want my hon. Friend to go further, but does he agree with that proposition?

Mr. Freeman: I may say to my hon. and learned Friend that we are dealing with a separate issue concerning the failure to erase from the NIB's records Major Cory's conviction after it was quashed. That is a separate issue, which I take very seriously. I agree with my hon. and learned Friend if the sense of his intervention is that proper

consideration should be given by the Ministry of Defence to any claims that might arise. I give my hon. and learned Friend my assurance that this matter will be treated very seriously and very thoroughly.
To sum up, I thank my hon. Friend the Member for Basingstoke for raising this matter and for giving me an opportunity to emphasise to the House that, when the courts martial appeal court quashed Major Cory's conviction, he was totally exonerated by its judgment.
I should also add, because I know that this point has worried my hon. Friend, that any omissions in Mr. Ramsden's statement were made in the interests of brevity. Let me also say that I am as anxious as my hon. Friend that the parliamentary record relating to Mr. Ramsden's statement and questions to Mr. Ramsden should, if necessary, be amended and made clear. He and I are at one on that. We want to ensure that, although the event occurred 25 years ago, the record is clear, unambiguous, constructive and helpful. The appeal court clearly quashed Major Cory's conviction, and it is my duty, which I take very seriously, to ensure that if there were factual inaccuracies—and I trust that the further evidence to be provided by Major Cory's legal advisers, if there are such representations, will be taken seriously—any necessary corrections will be made and put on the parliamentary record.
Finally, I offer my Department's apologies for the error in not notifying the NIB that Major Cory's conviction had been quashed. I should be grateful if my hon. Friend would convey my apologies, continued interest in the case and best wishes to Major Cory.

Question put and agreed to.

Adjourned accordingly at one minute past Twelve midnight.